Govt\\\'s big investment in Teletalk turns barren

State-owned Teletalk has never paid dividends from its mobile-phone business to the national exchequer, creating strong dissatisfaction among finance officials, sources said.
And people familiar with its financial matters are of the view that the mobile phone operator would even not be able to pay in the near future as it bears a big burden of cumulative losses.
To make it profitable and competitive on Bangladesh's fast-growing telephony market, the government has injected Tk 30 billion, including Tk 6.43 billion as a paid-up capital, into the company since its inception in 2004.
Some of its high-ups attributed the losing streak mainly to higher depreciation cost of equipment while others blamed low investment in the fastest- changing technology-based industry.
They also listed a host of other ills: poor networks, lack of efficient employee, lower promotional activities and weak management system.
All this stands in the way of turning Teletalk into a sound organisation, while most private mobile phone operators swim in successes.
For non-payment of any dividend by the Teletalk, the finance authorities are being deprived of getting such returns as sole owner of the company.
The finance division, which looks desperate to raise state revenues, is searching for the loopholes that are causing such chronic losses.
After its investigation, the finance division will prepare a detailed report on the operator shortly.
"We're working and have already talked to the senior positions of the company," said an official at the finance division.
Dividends are important part of government revenue and policymakers want increased revenues from the state-owned enterprises as many of them have been incurring losses for years for lack of efficient management and for bureaucratic tangles.
However, top officials working with the Teletalk Bangladesh Ltd told the FE that they could not announce dividends as the company goes sweating under a burden of recurrent losses amounting to more than Tk 2.0 billion.
They have two cardinal points of defence -- the company is not getting expected benefits from its large investments in Chittagong Hill Tracts (CHT) and the country's largest mangrove forest Sundarbans.
Md Gias Uddin, managing director of Teletalk, said: "This is a capital-intensive industry and for lack of adequate capital we cannot compete with the private operators."
He also mentioned that their network penetration is lower than the private operators', leading to fall in gross revenues.
It has around 60 per cent coverage while Grameen Phone (GP), the largest mobile-phone operator in Bangladesh, has 99 per cent.
"More network, more subscribers and more revenues," said its head of sales, Md Shah Alam, on Thursday.
It has 3,000 BTS (base transceiver station), a piece of equipment that facilitates wireless communications between user equipment and a network. GP has 12,000 BTS.
Some 10,000 BTS are believed to be adequate for whole Bangladesh coverage.
Teletalk claims installation of BTS at the Sundarbans was quite expensive as each costs Tk 20 million. BTS installation on rooftop of buildings costs around Tk 6.0 million.  
Company-insiders said Teletalk in the year to June 2014 had net losses of more than Tk 200 million. Its total earnings stood at Tk 9.50 billion that year.
On the other hand, it made a profit of Tk 450 million in 2013, but, after adjusting with the cumulative figures, its profit got diluted into negative domain.
The cumulative losses were incurred in its early stages when its revenue was too meagre in proportion to the investment.
"We make scanty profit and it cannot exceed the huge cumulative losses," said an official at its finance and accounts department.
"We cannot say right at this moment when we will be able to announce the dividend as we've more than Tk 2.0 billion as cumulative losses."
He rather said the company debt-equity ratio is on the rise in recent years as it took loans for 3G operation.
This is the first company to have gone into the 3G operation, begun in 2012, at a cost of Tk 20 billion.
Of the amount, 50 per cent was provided by government and the rest managed by the government as credits from Chinese Exim Bank.
A section of officials said it is not making profit as it has been running some services on purely social considerations.
It provides SMS services for results of public examinations.
Also, the state telephony provides the same for recruitment procedures of the Public Service Commission, universities, colleges and schools.
"In many cases, we provide such type of services free of cost and in many cases we charge for those but the earning is too low," said Md Shah Alam, carrying out further calculations.
In the meantime, the phone operator claimed that its subscribers are now rising fast following fast data services on the information superhighway.
Its present spectrum uses have increased manifold to 32 terabytes a day. It was 2/3 terabytes earlier.
GP is also leader on the data market as its uses nearly doubled that of the Teletalk.
It claimed second position in the fastest-growing data market of the knowledge economy.
According to the company, it has 4.0 million active subscribers. It will come to 5.6 million if the inactive SIMs were counted.
The company sources said over 500,000 subscribers joined them in four months to end of April this year.
Currently, GP and Robi post profits on quarterly basis while another private operator - Banglalink -- hints to the FE that it may be a profitable entity by December this calendar year.
    jasimharoon@yahoo.com