Bangladesh, India set to compete for the same set of investors
FE Report | Friday, 29 August 2008
Bangladesh and India are set to compete for the same set of telecom investors with Bangladesh announcing auctions for Broadband Wireless Access (BWA) spectrum close on the heels of India unveiling its BWA policy, according to a report of an Indian newspaper.
However, while Bangladesh's policy is designed to attract fresh competition by keeping its existing operators and their shareholders (foreign and Bangladeshi) out of the spectrum bids, India has opted for a different route.
India has restricted BWA bidding to only those who either hold an ISP or a unified access service (UAS) licence, thereby either forcing companies to acquire ISP/UAS licenses before the bidding or keeping away new entrants who are unable to acquire such licences due to price or time constraints.
"Other contrasts are equally striking and show up uncomfortable flaws with India's auction guidelines," says a telecom analyst. While India's BWA guidelines are just four pages, Bangladesh's is a 57-page invitation for applications for grant of licence. This includes a 30-page licence agreement and detailed terms of interconnection and tariffs.
"The Bangladeshi government is in the process of issuing written clarifications on the licences and holding pre-offer/pre-bid meetings with potential investors, while the department of telecommunication (DoT), India has only initiated the process of appointing an auctioneer and is yet to reveal critical details for potential bidders," the newspaper said quoting a senior executive in a telecom firm as saying.
India intends to auction four licences with 20 MHz of BWA spectrum each, while Bangladesh will auction three licences with a contiguous 35 MHz of spectrum each.
The fourth licence will be reserved for Bangladesh Telecom Regulatory Commission (BTRC) after it matches the highest bid.
While DoT has restricted BWA services for data alone, Bangladesh has allowed a full range of voice and data applications.
The reserve price of Tk 250 million (Tk 25 crore) for the auction in Bangladesh with an application fee of Tk 50,000 (Tk 50,000) is modest compared to India's minimum entry of Rs 5050 million (Rs 505 crore).
An annual licence fee of Tk 30 million (Tk 3 crore) will be payable with a revenue share of 0 per cent for the first year, 2 per cent for the third year and 4 per cent for each subsequent year.
However, while Bangladesh's policy is designed to attract fresh competition by keeping its existing operators and their shareholders (foreign and Bangladeshi) out of the spectrum bids, India has opted for a different route.
India has restricted BWA bidding to only those who either hold an ISP or a unified access service (UAS) licence, thereby either forcing companies to acquire ISP/UAS licenses before the bidding or keeping away new entrants who are unable to acquire such licences due to price or time constraints.
"Other contrasts are equally striking and show up uncomfortable flaws with India's auction guidelines," says a telecom analyst. While India's BWA guidelines are just four pages, Bangladesh's is a 57-page invitation for applications for grant of licence. This includes a 30-page licence agreement and detailed terms of interconnection and tariffs.
"The Bangladeshi government is in the process of issuing written clarifications on the licences and holding pre-offer/pre-bid meetings with potential investors, while the department of telecommunication (DoT), India has only initiated the process of appointing an auctioneer and is yet to reveal critical details for potential bidders," the newspaper said quoting a senior executive in a telecom firm as saying.
India intends to auction four licences with 20 MHz of BWA spectrum each, while Bangladesh will auction three licences with a contiguous 35 MHz of spectrum each.
The fourth licence will be reserved for Bangladesh Telecom Regulatory Commission (BTRC) after it matches the highest bid.
While DoT has restricted BWA services for data alone, Bangladesh has allowed a full range of voice and data applications.
The reserve price of Tk 250 million (Tk 25 crore) for the auction in Bangladesh with an application fee of Tk 50,000 (Tk 50,000) is modest compared to India's minimum entry of Rs 5050 million (Rs 505 crore).
An annual licence fee of Tk 30 million (Tk 3 crore) will be payable with a revenue share of 0 per cent for the first year, 2 per cent for the third year and 4 per cent for each subsequent year.