Base price for 3G auction: $20m

January 2, 2013
Base price for 3G auction: $20m

The finance ministry has set $20 million for per megahertz spectrum as the base or starting price for 2100 MHz band auction to roll out 3G or 4G service in Bangladesh.

Sunil Kanti Bose, chairman of Bangladesh Telecommunication Regulatory Commission, said the finance ministry has approved the base price recently.

But the winners of the bid will have to pay an additional 15 percent value added tax on the final price of the spectrum, he said.

According to the current finance bill, all the operators will have to pay the VAT to the telecom regulator, while earlier they used to deposit 85 percent to the BTRC and the rest to the tax regulator, he said.

He also said some cases are pending with the apex court on whether the operators would get a tax rebate.

“That is not the BTRC's concern,” he said.

Bose said the telecom ministry would send him a final guideline on 3G licensing within seven days and then the BTRC would start the process.

“The regulator will initiate the auction for 2100 MHz band in three months after getting the final guideline from telecom ministry,” he said.

A total of four licences will be given to the mobile operators to roll out 3G, 4G or LTE (long-term evolution) technology.

LTE is a wireless broadband internet technology and more upgraded than 3G.

However, the bid winners will have to pay 60 percent of the spectrum fees in the first three months and the rest in the next six months.

The telecom ministry suggested the base price at $20 million and sent the proposal to the finance ministry in October, while the BTRC proposed $30 million. Earlier in an interview with The Daily Star, Bose said, "We have proposed the amount keeping in mind the spectrum prices for 2G licence renewal."

The operators would get the opportunity to buy minimum 5 MHz to maximum 15 MHz spectrum to launch the 3G service. Previously, the telecom regulator proposed the operators should buy at least 10 MHz spectrum.

"No new entrant will get extra benefit in the auction as the government does not think seven mobile operators are needed in Bangladesh," he said. "We don't encourage any new entrant," said Bose.

In the draft 3G guideline, the BTRC proposed reduced price for 2G spectrum for new entrants.

According to the industry analysts, the operators will be able to launch the 3G service within three months after the auction.

The government plans to make the 3G service available by the middle of the year. State-owned mobile operator Teletalk has launched the 3G service on a trial basis from October.

Teletalk will also get a licence without participating in the auction, while five local private operators -- Grameenphone, Banglalink, Robi, Airtel and Citycell -- along with foreign firms will fight for the rest four licences.

But Teletalk will have to pay for its 10 MHz spectrum at the rate the other operators will pay.

[Source: Abdullah Mamun (Daily Star)]

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