Progress made on operator issues as 12 August 3G deadline looms; ‘no foreign interest’

6 Aug 2013

Bangladesh’s mobile network operators have been exempted from paying 15% VAT on their regulatory revenue-sharing fees, via a Statutory Regulatory Order (SRO) issued by the National Board of Revenue (NBR) on Monday, reports the Dhaka Tribune. Previously, cellcos were forced to pay VAT on the 5.5% revenue-sharing fees which they pay to the Bangladesh Telecommunication Regulatory Commission (BTRC), despite already incurring VAT on their total revenues.

As part of ongoing efforts to resolve multiple issues between the cellcos and the state (including arguments over tax) before the country’s 3G licence auction, the operators have held a series of meetings with the NBR, following which the tax regulator has formed a committee to review the controversial SIM replacement tax and announced that it will consider cutting the VAT on 3G spectrum charges to 2.5% from the existing 7.5%. The private companies have stated they will only enter the 3G auction after all tax-related disputes and court cases are resolved.

The BTRC has pushed back the schedule for the 3G auction for a third time in the midst of the wrangling, with the bidding now scheduled to take place on 8 September (moved from 2 September). The BTRC stated that the deadline for filing bidding applications has been moved to 12 August (having previously been set for 1 August).

Meanwhile, three private sector operators, GrameenPhone, Robi and Banglalink, have reportedly settled the final instalments of their 2G licence renewals agreed last year, having each now paid totals of: GrameenPhone (BDT32.41 billion [USD410 million] for a 14.6MHz spectrum allocation), Banglalink (BDT19.71 billion for 12.4MHz) and Robi (BDT19.0 billion for 12.8MHz). CityCell must pay a total of BDT4.50 billion for its 10MHz licence renewal, but has reportedly not yet settled the bill.

In related news, the Tribune quotes Sunil Kanti Bose, chairman of the BTRC, as saying that there is no overseas interest in bidding for a Bangladeshi 3G licence, despite there being earlier interest shown by at least one Asian operator and two from Europe. The regulator implied that the last remaining company to display intentions to bid, Japan’s NTT DoCoMo, was put off by the removal of an original stipulation in the licensing plan to award new 3G entrants an additional 2G concession at a discounted price, following opposition from the domestic operators.

Also this week, Bangladeshi state-owned cellco Teletalk – which received permission to launch 3G services last year ahead of the private sector auction – has expanded its UMTS network coverage with the launch of a trial network in the city of Sylhet, with a commercial launch expected ‘shortly’. The expansion had been delayed by ‘technical issues’; Teletalk offers commercial W-CDMA/HSPA services in Dhaka, Narayangan, Gazipur and Chittagong.