Taka depreciation sparks off row over payment terms

Deprecation of local currency taka against the US dollar has created a row over the mode of payment as mobile-phone operators are now reluctant to pay in terms of the greenback for a new slot of telecommunication spectrum.
Bangladesh Telecommunication and Regulatory Commission (BTRC) recently decided to allot a new 40 MHz of spectrum equally to the mobile phone operators - Grameenphone and Robi - as they applied for it in the 2.6 GHz band a year ago.
As instructed by the Department of Posts and Telecommunications, the commission decided to allocate this spectrum at a rate of US$ 6.5 million per megahertz for 15 years.
The price is fixed as per the auction held in 2022 and the payments should be made as per the exchange rate on the day of spectrum allocation.
However, the payment in US dollars has now become an apple of discord between the regulator and operators. They also raised objections to the mechanism for determining the spectrum price with the US dollar as the base currency.
The BTRC on Thursday last sent a letter to the operators seeking their views on the mechanism.
Spectrum Division Commissioner of the BTRC Engineer Sheikh Reaz Ahmed told the FE that GP and Robi will get 20 MHz each at the determined price.
He said the US dollar was the base currency for price determination during the previous auctions and it would remain the same in this case too.
The commissioner said the BTRC will always look at the issue of making profit and development of the country. "If the exchange rate is too high for them, they can pay in dollars."
However, a number of officials of both the operators said they do not deal with the Bangladesh government in dollars as the operators do not maintain any foreign currency account.
They also argued that the spectrum price should not be determined in US dollars as it is not an imported product.
The operators have received the letter from the BTRC with seven days' time to send their response in this regard.
Earlier, this 40 MHz spectrum had been allocated to the Bangladesh Internet Exchange Limited (BIEL), but was cancelled in July after the 2022 spectrum auction.
Then, GP and Robi expressed their interest in taking this spectrum.
On August 01 this year, a decision in this regard was taken at a meeting of the commission.
The spectrum allotted to GP and Robi will remain valid until the expiry of their 4G licence or until February 18, 2033.
However, if all the additional dues are paid together, the period will increase up to October 31, 2037.
Following allotment and initial payments of 10 per cent, the remaining amount can be paid in nine equal installments until February 18, 2033.
The annual spectrum charge will not have to be paid in the first year and it will have to be paid as per the rules from the second year.
Earlier on March 31 last year, GP and Robi bought 60 MHz of spectrum each in the 2.6 GHz band at a rate of $6.5 million per megahertz through the spectrum auction when the dollar rate was Tk 86.14 as compared to Tk 109.19 as on August 26, 2023.
According to Bangladesh Bank data, the exchange rate of the US dollar increased by Tk 23 or 26.75 per cent since March last year.

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