Operators plea for reasonable renewal fees
Wednesday, 23 March 2011
Raihan M Chowdhury
Four major mobile telecom operators-Grameenphone (GP), Banglalink, Robi and Citycell-reiterated their deep concern with the published draft license renewal guidelines which imposes abnormally high spectrum acquisition fee. As per the proposed guideline, Bangladesh's mobile operators have to pay $1.577 billion for three GSM licences and $85 million for a CDMA licence, plus non-sector-specific taxes and duties. GP to pay $ 754 million, Banglalink $ 410 million, Robi $ 411 million and Citycell $ 85 million. The licenses of these operators need to be renewed on November 11 of this year and the government is set to finalise the guideline very soon, industry sources told the FE. "The astronomically high amount of fee, the ever highest in the world history cannot be paid by us, even the financial institutions in Bangladesh are unable to cater such unprecedented amount as loan financing," Mahmud Hossain, chief corporate affairs officer of GP told the FE. He said the ultimate bearer of the huge burden will fall on the general customers and thus the growth rate of the mobile industry, a core segment of digital economy will be in negative territory. In a competitive market like Bangladesh whereby revenue earning per subscriber is one of the lowest in the world, the operators would be unable to make such unprecedented renewal fees, he said. Meanwhile, the GSM Association (GSMA) said Bangladesh Telecommunication Regulatory Commission (BTRC) should rethink its expectations of revenue generation. The GSMA said the proposed guideline, if finalised will drive mobile operators out of the market. The BTRC should "switch from a short term perspective of revenue maximisation to a medium-long term perspective of making sure the mobile bands are used" as efficiently as possible, it said. The proposed model for spectrum fees and charges punishes mobile operators for extensive use of their assigned spectrum. The Association also urged the government to limit licence fees to recovery of the administrative costs of the licensing process and associated regulatory costs, including spectrum management. Where there is excess demand for spectrum, there should be an auction or assignment in line with the marginal forward-looking opportunity cost of the spectrum, it said. The draft guidelines also propose a model for spectrum fees and charges that "punishes mobile operators for extensive use" of their assigned spectrum, the GSMA said. The "utilisation factor" seriously risks forcing operators to cut back on their use of spectrum, deploy fewer base stations, and consider handing some of their spectrum back to the regulator to cut fees and charges. Marginal customers and Bangladesh's mobile penetration will suffer, it said. In addition, raising licence prices above the underlying value of the
Four major mobile telecom operators-Grameenphone (GP), Banglalink, Robi and Citycell-reiterated their deep concern with the published draft license renewal guidelines which imposes abnormally high spectrum acquisition fee. As per the proposed guideline, Bangladesh's mobile operators have to pay $1.577 billion for three GSM licences and $85 million for a CDMA licence, plus non-sector-specific taxes and duties. GP to pay $ 754 million, Banglalink $ 410 million, Robi $ 411 million and Citycell $ 85 million. The licenses of these operators need to be renewed on November 11 of this year and the government is set to finalise the guideline very soon, industry sources told the FE. "The astronomically high amount of fee, the ever highest in the world history cannot be paid by us, even the financial institutions in Bangladesh are unable to cater such unprecedented amount as loan financing," Mahmud Hossain, chief corporate affairs officer of GP told the FE. He said the ultimate bearer of the huge burden will fall on the general customers and thus the growth rate of the mobile industry, a core segment of digital economy will be in negative territory. In a competitive market like Bangladesh whereby revenue earning per subscriber is one of the lowest in the world, the operators would be unable to make such unprecedented renewal fees, he said. Meanwhile, the GSM Association (GSMA) said Bangladesh Telecommunication Regulatory Commission (BTRC) should rethink its expectations of revenue generation. The GSMA said the proposed guideline, if finalised will drive mobile operators out of the market. The BTRC should "switch from a short term perspective of revenue maximisation to a medium-long term perspective of making sure the mobile bands are used" as efficiently as possible, it said. The proposed model for spectrum fees and charges punishes mobile operators for extensive use of their assigned spectrum. The Association also urged the government to limit licence fees to recovery of the administrative costs of the licensing process and associated regulatory costs, including spectrum management. Where there is excess demand for spectrum, there should be an auction or assignment in line with the marginal forward-looking opportunity cost of the spectrum, it said. The draft guidelines also propose a model for spectrum fees and charges that "punishes mobile operators for extensive use" of their assigned spectrum, the GSMA said. The "utilisation factor" seriously risks forcing operators to cut back on their use of spectrum, deploy fewer base stations, and consider handing some of their spectrum back to the regulator to cut fees and charges. Marginal customers and Bangladesh's mobile penetration will suffer, it said. In addition, raising licence prices above the underlying value of the