Five 3G licences to be awarded (not four); September auction targets USD1.5bn

29 Mar 2012

The Bangladesh Telecommunication Regulatory Commission (BTRC) yesterday submitted its final draft 3G licensing guidelines to the Ministry of Posts & Telecommunications (MoPT), under which it aims to earn around USD1.5 billion in spectrum fees via an open auction on 3 September 2012 for four 2100MHz licences alongside a fifth concession award to state-owned cellco Teletalk. As reported by the Financial Express, the Cellular Mobile Phone Service (3G/4G/LTE) Regulatory Licensing Guideline 2012 says that Bangladesh will issue five technology-neutral concessions for 10MHz each in the 2100MHz band to Teletalk, one new foreign entrant and three privately owned Bangladeshi mobile operators. It had previously been reported that there would be only four licence recipients including just two of the country’s private sector operators, but the document confirms the number as five. The BTRC also raised its previously quoted licensing revenue target from around BDT80 billion to BDT120 billion (USD1 billion to USD1.45 billion). The base price of 1MHz of 3G spectrum is BDT2.4 billion and therefore each operator must bid at least BDT24 billion for a 10MHz allocation (a floor price of nearly USD300 million per licence). Previously, the BTRC had set a base fee per MHz of BDT1.5 billion (a licence floor price of BDT15 billion). The rise in the recommended price for a next-generation licence may raise eyebrows, as TeleGeography’s GlobalComms Database notes that the BTRC had placed particular emphasis on setting an appropriate level of licence fee, which had previously proved too high in the case of Bangladesh’s WiMAX licence auction, resulting in one WiMAX concession winner being unable to pay up whilst others were burdened with initial start-up costs.

BTRC chairman Zia Ahmed said the regulator would seek expressions of interest from 7 May 2012, and begin receiving formal applications from 12 July. The final bidder list is scheduled to be announced on 19 July ahead of the 3 September auction. Lining up to compete for technology-neutral concessions will be four domestic GSM operators, GrameenPhone (backed by Telenor of Norway), Banglalink (part of the Egyptian Orascom group of companies recently merged with Vimpelcom), Malaysian-backed Robi Axiata, and the Bangladeshi division of India’s Airtel. Singapore-owned CDMA operator Pacific Bangladesh Telecom Limited (CityCell) is another potential bidder, while the BTRC will also consider applications for 2G licences from any overseas 3G concession winner, according to GlobalComms. Whether any prospective bidders have plans to use the 2100MHz frequencies for 4G LTE mobile broadband services is not yet known, although GlobalComms shows that the band has been used by some operators around the world for LTE, such as in Canada, where cellcos have extensively deployed their 4G networks in main cities using 2100MHz spectrum, whilst awaiting additional 800MHz/2600MHz frequencies to expand coverage nationwide.

As previously reported by CommsUpdate, the BTRC decided that Teletalk will be permitted to launch a 3G W-CDMA/HSPA trial using 2100MHz band frequencies from 26 March 2012, with a six-month exclusivity period preventing any other operators from launching commercially until late-September 2012. Teletalk will not need to compete in the 3G licence auction, but will pay for its UMTS spectrum allocation at a cost equal to the highest bid. The state-backed firm is yet to announce its trial 3G launch.

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