Sale of Teletalk's stake to Vietnamese firm ruled out
Sunday, 27 December 2009
FE Report
Posts and telecoms minister has ruled out sale of stake in the ailing state-owned Teletalk Bangladesh Limited following a US$300 million offer from Vietnamese telecom firm, Viettel.
Rajiuddin Ahmed Raju said his government was instead looking for a possible tie-up with the Vietnamese government-owned telecom operator now planning to spread its wings from South East Asian nation.
"We've got a proposal from Viettel for a partnership with Teletalk. Viettel has said it would invest around $300m in Teletalk," he said.
Raju rejected the possibility of sale of minority or majority stake of the company in exchange for the cash injection although reports in local media suggest that the Viettel was trying to purchase 60 per cent stake in the Teletalk.
Chief Executive Officer of Teletalk Mojibur Rahman refused to talk about the planned sell of his company's stake. "The ministry is working on the issue," he said.
Teletalk, the fifth company to launch mobile phone service, is cur-rently ranked as the bottom-placed among the country's six cell phone operators.
The company, fully-owned and run by the government, had 1.06 million mobile phone subscribers till November this year out of more than 51 million users nationwide.
Teletalk officials have said the company has failed to fulfill its expectations due to lack of investment in network and an all-out price war launched by the market leaders.
"If we can't invest heavily in network expansion, it will be impossible to even keep the existing subscribers. We need multi-million dollar investment, which the government has yet to provide," an official said.
Officials said stake sell-off was the best option to make the company vibrant and take its services deep into the largely untapped rural heartland.
Raju said worries over Teletalk's investment could be over within months after the government got a $211 million dollar soft-loan assurance from the Chinese government.
"The talks are in final stage. We shall get the loan at a two per cent interest rate," he said, adding the fund would be invested in Teletalk's foray into 3G (third generation) mobile phone service.
"We hope we can add another 5.5 million subscribers with the launch of Teletalk's 3G services," he said.
Viettel's offer comes amid increasing interest in the country's fast growing mobile phone market.
Early this month the country's telecoms regulator said Indian mobile phone giant Bharti Airtel has sought to buy 70 percent stake in Warid Telecom from the Dhabi Group, its United Arab Emrates-based owners.
Bharti's purchase of the majority stake in Bangladesh's fourth largest mobile phone operator would make it the first Indian company to plan expansion across the border.
Bharti said it was looking at potential purchases in the South Asian Association for Regional Cooperation (SAARC) region, including Bangladesh, but declined comment on whether it wanted to purchase Warid.
In 2004, Egyptian Orascom took over Sheba and Singapore's state-owned Singtel bought a 45 percent stake in Bangladesh Telecom in 2005.
Last year Japan's NTT DoCoMo Inc. paid 350 million dollars to buy a 30 percent stake in operator AKTEL, majority owned by Axiata of Malaysia.
Posts and telecoms minister has ruled out sale of stake in the ailing state-owned Teletalk Bangladesh Limited following a US$300 million offer from Vietnamese telecom firm, Viettel.
Rajiuddin Ahmed Raju said his government was instead looking for a possible tie-up with the Vietnamese government-owned telecom operator now planning to spread its wings from South East Asian nation.
"We've got a proposal from Viettel for a partnership with Teletalk. Viettel has said it would invest around $300m in Teletalk," he said.
Raju rejected the possibility of sale of minority or majority stake of the company in exchange for the cash injection although reports in local media suggest that the Viettel was trying to purchase 60 per cent stake in the Teletalk.
Chief Executive Officer of Teletalk Mojibur Rahman refused to talk about the planned sell of his company's stake. "The ministry is working on the issue," he said.
Teletalk, the fifth company to launch mobile phone service, is cur-rently ranked as the bottom-placed among the country's six cell phone operators.
The company, fully-owned and run by the government, had 1.06 million mobile phone subscribers till November this year out of more than 51 million users nationwide.
Teletalk officials have said the company has failed to fulfill its expectations due to lack of investment in network and an all-out price war launched by the market leaders.
"If we can't invest heavily in network expansion, it will be impossible to even keep the existing subscribers. We need multi-million dollar investment, which the government has yet to provide," an official said.
Officials said stake sell-off was the best option to make the company vibrant and take its services deep into the largely untapped rural heartland.
Raju said worries over Teletalk's investment could be over within months after the government got a $211 million dollar soft-loan assurance from the Chinese government.
"The talks are in final stage. We shall get the loan at a two per cent interest rate," he said, adding the fund would be invested in Teletalk's foray into 3G (third generation) mobile phone service.
"We hope we can add another 5.5 million subscribers with the launch of Teletalk's 3G services," he said.
Viettel's offer comes amid increasing interest in the country's fast growing mobile phone market.
Early this month the country's telecoms regulator said Indian mobile phone giant Bharti Airtel has sought to buy 70 percent stake in Warid Telecom from the Dhabi Group, its United Arab Emrates-based owners.
Bharti's purchase of the majority stake in Bangladesh's fourth largest mobile phone operator would make it the first Indian company to plan expansion across the border.
Bharti said it was looking at potential purchases in the South Asian Association for Regional Cooperation (SAARC) region, including Bangladesh, but declined comment on whether it wanted to purchase Warid.
In 2004, Egyptian Orascom took over Sheba and Singapore's state-owned Singtel bought a 45 percent stake in Bangladesh Telecom in 2005.
Last year Japan's NTT DoCoMo Inc. paid 350 million dollars to buy a 30 percent stake in operator AKTEL, majority owned by Axiata of Malaysia.