Mobile operators have opposed the telecom regulator's proposal to hike the spectrum prices and revenue sharing percentage for 4G services on grounds that the move would make the technology commercially unviable.
In the proposed guideline for 4G services, the Bangladesh Telecommunication Regulatory Commission called for 15 percent revenue sharing with operators.
At present, the operators share 5.5 percent of their gross revenue from 2G and 3G services with the BTRC. They also forward 1 percent of their proceeds as contribution towards the social obligation fund.
In a letter sent to Tarana Halim, state minister for telecom, the operators said the high spectrum charges, overall high taxation, low data rate, low average revenue per user, low penetration of 4G-enabled handsets do not justify any increase of revenue sharing.
“In the current context, any increase in revenue sharing will make the business case for 4G totally unviable,” said the letter signed by TIM Nurul Kabir, secretary general of the Association of Mobile Telecom Operators of Bangladesh.
It is also pertinent to highlight that technology-based revenue sharing is impractical and unworkable, it said. On its proposed guideline, the BTRC suggested Tk 15 crore as licence fees for 15 years and another Tk 7.5 crore as annual fees.
“Telecom is a capital-intensive industry and the question now is whether the industry can bear any more fees or taxes,” the letter said. The telecom division yesterday forwarded the guideline to the finance ministry for final approval, said Shyam Sunder Sikder, secretary of the division.
The telecom regulator is also drafting another guideline, where it proposed $25 million for each MHz of spectrum and another $7-$8 million for per MHz of technology neutrality.
“Spectrum price in Bangladesh is unusually high compared to benchmark countries,” the operators said in the letter. The government is sitting on 148 MHz of unsold spectrum, whereas the operators are forced to run on low level of spectrum.
“The increase in spectrum price demonstrates the confusing stance of the government in ensuring quality of services for the end consumers.”
The operators said the spectrum licences should be technology and service neutral as it would be used efficiently rather than being tied to declining technologies and services.
Technology neutrality means the operators would have the choice to use their spectrum as they see fit.
The operators have started their preparations for 4G rollout. They have already run tests on the 2,100 band and got a reasonable 50 to 100 Mbps of speed for both uploads and downloads.
At present, they are offering 3G services from this band, which they acquired in 2013 in an auction at a price of $21 million per MHz.
“If the government is determined to impose so much charge, we will jointly go for a tough stance,” said a top executive of an operator requesting anonymity.
Before submitting the letter the AMTOB members had met with Finance Minister AMA Muhith and Tarana to voice their grievances.
Out of every Tk 100 revenue that the operators earn, Tk 47 goes to the national exchequer, they informed the two ministers.
The mobile operators have invested over $3.8 billion in 3G technology since 2013 but they are yet to recoup the cost, let alone make any profit in the 3G segment, they said.
Currently, 4G services, which offer broadband mobile capabilities, are available in all the neighbouring countries save for Bangladesh.
As of February, there are around 6.31 crore mobile internet users in Bangladesh, around 3 crore of whom use 3G services.
Source: http://www.thedailystar.net/business/operators-oppose-proposal-hike-spectrum-prices-1392691
