Industry Updates

The much-awaited launch of the country’s first satellite Bangabandhu 1 is likely to be further delayed as a revised project proposal with 9% cost reduction is set to be placed before Ecnec today.

The project deadline has already been extended twice: from June 2015 to June 2016, and then to June 2017.

Sources however claimed that completing the project was possible by June 2017.

“Let us see what the government tells us; we are waiting for directives,” BTRC Chairman Sunil Kanti Bose told the Dhaka Tribune last week.

Earlier, the Bangladesh Telecommunications Regulatory Commission (BTRC), the main stakeholder for launching the satellite, decided to acquire the 119.1 East orbital slot from Russian company Sputnik for $28m. But the Finance Ministry objected the decision and halted the move.

Bangladesh had previously applied for three alternative orbital slots: 102 East, 69 East and 133 East. But Finance Ministry sources said the BTRC was keen on acquiring a new slot, causing the project cost to rise.

Earlier this year, Finance Minister AMA Muhith raised objections about the estimated costs and asked the telecom regulator to revise it.

In a letter to the BTRC, he asked if it was possible to bring down the cost to Tk2,500 crore from the proposed Tk3,253 crore.

In 2012, the Executive Committee of National Economic Council (Ecnec) approved Tk3,253 crore for the project. But following Muhith’s objections, the BTRC drafted a revised recommendation for Tk2,967.96 crore this March. Today’s Ecnec meeting will review the revised BTRC proposal.

The Finance Ministry is also considering other alternatives for the orbital slot and questioned the process of the satellite’s launching, maintenance and funding, according to documents.

Industry insiders told the Dhaka Tribune that the disagreement between the BTRC and the ministry would only lead to wastage of more time. They also raised questions about the process of buying the orbital slots, likening the situation to buying a car without having a road.

“We have succeeded to secure our maritime rights because of the government’s good political will, whereas we are yet to secure our legitimate right in the orbital slot because of the lack of such commitment from the country’s top leadership,” said Abu Saeed Khan, a senior policy fellow of the Colombo-based regulatory think tank LIRNEasia and a former secretary of the Association of Mobile Telecom Operators of Bangladesh (Amtob).

During last week’s CTO forum in Dhaka, neither the regulator nor the ministry pursued the satellite issue with the member countries – some of whom questioned Bangladesh’s application for the 102 East orbital slot.

Asked why the issue was not on the forum’s agenda, the BTRC chairman said: “We are approaching with a different strategy to resolve the satellite disputes.”

Finance Ministry sources said Chinese company China Great Wall Industry Corporation (CGWIC), placed a proposal in March offering to launch the satellite for less than Tk2,000 crore. Sources also said the ministry had also found six other funding proposals from multinational banks and firms.

The CGWIC proposal was reportedly placed by the company’s local partner Focus Consortium Limited. Zakir Hasan, chairman of Focus Consortium, refused to make any comment.

CGWIC sources said Prime Minister Sheikh Hasina, during her 2010 China visit, had asked her counterpart for assistance in the project.

Seeking anonymity, a senior BTRC official said: “We have been in an uncomfortable position because of the the BTRC and the Finance Ministry’s conflicting stances.”

The CGWIC proposal states the 5.1-tonne satellite with an expected lifetime of 15 years would be launched to the orbit within 30 months. The proposal also included a loan offer from the Chinese Exim Bank, where the Bangladesh government would have to give sovereign guarantee with 85%-95% support.

Some other proposals have reportedly also come in from the Export-Import Bank of the USA, HSBC France, Japan Bank for International Cooperation, and CWG Gulf International of the UK.

But sources said the revised DPP does not mention anything about foreign investment in the project.

Earlier, in the first DPP, the BTRC drafted a projected government expenditure of Tk1,555 crore out of a total of Tk3,253 crore cost, with the rest coming from foreign sources.

Although the government is yet to reach any final decision on the DPP, the BTRC has already spent Tk86 crore for paying consultancy fees.

Questioning BTRC’s involvement in launching the satellite, LIRNEasia official Abu Saeed said the BTRC had moved away from its regulatory role and taken on the responsibilities of a satellite provider. He added that the BTCL - the initial choice - would have been a more suitable candidate.

In 1999, the then Awami League government took the first initiative for the satellite, while it was also discussed that the then BTTB (Bangladesh Telegraph and Telegram Board) – which is now the Bangladesh Telecommunication Company Limited (BTCL) – would launch the satellite.

Earlier this year, the telecom regulator also placed a commercial forecast estimating that the satellite would reach break even in seven years.

According to BTRC, the satellite can save at least $14m every year, which is now being paid to different foreign companies by the country’s 28 television channels for transmission. The BTRC also claimed that 70% of the satellite’s revenue would come from neighbouring countries while the rest would be from local sources. 

The much-awaited launch of the country’s first satellite Bangabandhu 1 is likely to be further delayed as a revised project proposal with 9% cost reduction is set to be placed before Ecnec today.

The project deadline has already been extended twice: from June 2015 to June 2016, and then to June 2017.

Sources however claimed that completing the project was possible by June 2017.

“Let us see what the government tells us; we are waiting for directives,” BTRC Chairman Sunil Kanti Bose told the Dhaka Tribune last week.

Earlier, the Bangladesh Telecommunications Regulatory Commission (BTRC), the main stakeholder for launching the satellite, decided to acquire the 119.1 East orbital slot from Russian company Sputnik for $28m. But the Finance Ministry objected the decision and halted the move.

Bangladesh had previously applied for three alternative orbital slots: 102 East, 69 East and 133 East. But Finance Ministry sources said the BTRC was keen on acquiring a new slot, causing the project cost to rise.

Earlier this year, Finance Minister AMA Muhith raised objections about the estimated costs and asked the telecom regulator to revise it.

In a letter to the BTRC, he asked if it was possible to bring down the cost to Tk2,500 crore from the proposed Tk3,253 crore.

In 2012, the Executive Committee of National Economic Council (Ecnec) approved Tk3,253 crore for the project. But following Muhith’s objections, the BTRC drafted a revised recommendation for Tk2,967.96 crore this March. Today’s Ecnec meeting will review the revised BTRC proposal.

The Finance Ministry is also considering other alternatives for the orbital slot and questioned the process of the satellite’s launching, maintenance and funding, according to documents.

Industry insiders told the Dhaka Tribune that the disagreement between the BTRC and the ministry would only lead to wastage of more time. They also raised questions about the process of buying the orbital slots, likening the situation to buying a car without having a road.

“We have succeeded to secure our maritime rights because of the government’s good political will, whereas we are yet to secure our legitimate right in the orbital slot because of the lack of such commitment from the country’s top leadership,” said Abu Saeed Khan, a senior policy fellow of the Colombo-based regulatory think tank LIRNEasia and a former secretary of the Association of Mobile Telecom Operators of Bangladesh (Amtob).

During last week’s CTO forum in Dhaka, neither the regulator nor the ministry pursued the satellite issue with the member countries – some of whom questioned Bangladesh’s application for the 102 East orbital slot.

Asked why the issue was not on the forum’s agenda, the BTRC chairman said: “We are approaching with a different strategy to resolve the satellite disputes.”

Finance Ministry sources said Chinese company China Great Wall Industry Corporation (CGWIC), placed a proposal in March offering to launch the satellite for less than Tk2,000 crore. Sources also said the ministry had also found six other funding proposals from multinational banks and firms.

The CGWIC proposal was reportedly placed by the company’s local partner Focus Consortium Limited. Zakir Hasan, chairman of Focus Consortium, refused to make any comment.

CGWIC sources said Prime Minister Sheikh Hasina, during her 2010 China visit, had asked her counterpart for assistance in the project.

Seeking anonymity, a senior BTRC official said: “We have been in an uncomfortable position because of the the BTRC and the Finance Ministry’s conflicting stances.”

The CGWIC proposal states the 5.1-tonne satellite with an expected lifetime of 15 years would be launched to the orbit within 30 months. The proposal also included a loan offer from the Chinese Exim Bank, where the Bangladesh government would have to give sovereign guarantee with 85%-95% support.

Some other proposals have reportedly also come in from the Export-Import Bank of the USA, HSBC France, Japan Bank for International Cooperation, and CWG Gulf International of the UK.

But sources said the revised DPP does not mention anything about foreign investment in the project.

Earlier, in the first DPP, the BTRC drafted a projected government expenditure of Tk1,555 crore out of a total of Tk3,253 crore cost, with the rest coming from foreign sources.

Although the government is yet to reach any final decision on the DPP, the BTRC has already spent Tk86 crore for paying consultancy fees.

Questioning BTRC’s involvement in launching the satellite, LIRNEasia official Abu Saeed said the BTRC had moved away from its regulatory role and taken on the responsibilities of a satellite provider. He added that the BTCL - the initial choice - would have been a more suitable candidate.

In 1999, the then Awami League government took the first initiative for the satellite, while it was also discussed that the then BTTB (Bangladesh Telegraph and Telegram Board) – which is now the Bangladesh Telecommunication Company Limited (BTCL) – would launch the satellite.

Earlier this year, the telecom regulator also placed a commercial forecast estimating that the satellite would reach break even in seven years.

According to BTRC, the satellite can save at least $14m every year, which is now being paid to different foreign companies by the country’s 28 television channels for transmission. The BTRC also claimed that 70% of the satellite’s revenue would come from neighbouring countries while the rest would be from local sources.