Telcos tangle over spectrum purchase

Market leader Grameenphone and its three rivals--Robi, Banglalink and Teletalk--appear to be at loggerheads over spectrum procurement.
The row came to light after a top executive of Robi said it will not take new spectrum now if not given free, but GP is willing to pay.
The discord emerged when three mobilephone operators demanded the Bangladesh Telecommunication Regulatory Commission give them additional spectrum for free for three months to cope with the surging demand during the lockdown aimed at containing the spread of coronavirus in the country.
The operators made the request, in a letter sent to the telecom regulator last week, but GP didn't apply for spectrum.
Apart from the demand for spectrum, the operators urged the telecom regulator to enforce the Significant Market Power Regulations.
Besides, the three operators urged the telecom regulator to persuade the revenue collecting authorities to slash corporate taxes on the operators.
Shahed Alam, chief corporate and regulatory officer at Robi Axiata Limited, said it is asking for the spectrum at free of cost temporarily to handle the unprecedented network capacity crisis caused by COVID-19 pandemic so that people can get their desired data experience.
He said they will not purchase the spectrum now, if the regulator does not provide it free of cost.
Mr Alam said they have long been requesting the government to reduce the price of spectrum to make it viable for them to purchase the amount of spectrum the operator needs to satisfy customers' quality expectations.
"Against this backdrop, we had applied for additional spectrum with discounted price to the government and the BTRC last year, which is still pending for regulatory approval," he said.
"… the request was made under normal circumstances, but now with the pandemic in place, we need to approach it differently and with immediate effect to address the crying need of the customers who have been compelled to adopt a digital lifestyle to remain connected to the society," he added.
According to officials, data traffic has increased by more than 25 per cent on Robi network during the lockdown.
Other operators also experienced similar data demand surge.
"In this situation, it is not possible for us to meet the quality expectations from our customers unless we are provided additional spectrum," He said
"That's why, we have requested the government to consider allocating us some additional spectrum for three months period without any charge in the greater public interest," he explained.
He said within seven days they will be able to significantly improve the quality of service experienced by the customers.
"At the end of the three months period, the government can take back the additional spectrum," he said.
He also said three other mobile operators back the Robi's position.
But the largest mobile operator Grameenphone doesn't want any free spectrum.
Grameenphone wants idle spectrum at a discounted rate as opposed to free of charge spectrum sought by three other operators.
Explaining the reason, director and regulatory affairs head of GP Hossain Sadat recently told the Financial Express it believes this is the time all need to come forward and join hands with the government in fighting the COVID-19.
"While we are making contribution in many forms, we cannot support asking for free allocation of spectrum," he told FE.
He said, "We think the spectrum needs can be sorted out in a win-win manner."
Mr Sadat said the government can consider allocation of spectrum at a discounted rate for a certain time period.
"This way, the government will get some money. We the operators would enhance our capability helping our customers to meet their communication needs - this would then be turned into revenue. This would then be shared with the government in the manner of revenue sharing," he added.
A number of officials working with the telecom industry said the largest operator does not want spectrum to be free or cheaper.
"The more expensive the spectrum, the greater is the chance the largest operator controls the market," said a senior official, who works for one of the three operators.
However, both the telecom minister and BTRC chairman refused to allocate the spectrum to mobile phone service providers either at a discounted price or free of charge during the Covid-19 emergency.
BTRC chairman Md Jahurul Haque told FE recently that the three mobile operators will have to purchase additional spectrum at the previous bidding rate to meet the growing demand for data during the shutdown, which will continue until May 5.
He said the BTRC can't allocate spectrum free of charge or at reduced price, violating the existing rules.
Posts and telecommunication minister Mustafa Jabbar also said, "During this crisis, we will not allocate spectrum at a discount or for free to any service provider."
An official working with state-owned Teletalk, seeking anonymity, said this was not the case.
"When we applied for the idle spectrum for three months, we had informal discussion with BTRC officials and they were ready to provide spectrum at free of cost, but it changed its stand when GP was willing pay," he said.
In the last auction for 4G technology in 2018, the BTRC fixed $27 million as the floor price for per MHz of spectrum in the 2,100 band, and $30 million per MHz in the 1,800 and 900 bands.
At that time, Banglalink acquired a total of 10.6MHz spectrum - 5MHz in the 2,100 band and 5.6 MHz in the 1,800 band - for Tk25.58 billion, while Grameenphone took 5 MHz only in the 1800 band at a price of Tk12.84 billion.
Robi and now-defunct Citycell did not participate in that auction.
At present, Grameenphone has 37MHz spectrum, Robi 36.4MHz, Banglalink 30.6MHz and Teletalk 25.2MHz in three different bands.
Regulators in the US, Ireland, Jordan, and Saudi Arabia have already started allocating free spectrum in favour of mobile operators to deal with the data traffic surge during the Covid-19 pandemic.
Currently, BTRC has 27.4 MHz spectrum unallocated in 1,800 and 2,100 bands, which are generating no value for the economy.
The 2,100 MHz spectrum is required to meet the growing data demand in rural areas.

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