Bangladesh 4G spectrum auction falls short of expectations

Tuesday 13 February 2018 | 20:46 CET | News

Bangladesh has raised a total of BDT 52.89 billion from its 4G spectrum auction, less than half the expected proceeds. Banglalink and Grameenphone acquired new spectrum to support the launch of LTE services, while Robi agreed to pay a fee to make its existing spectrum technology-neutral for 4G. The LTE services are expected to start later this month after the licences are issued. 

Veon and Global Telecom announced that Banglalink, their subsidiary in Bangladesh, has been awarded spectrum in the 1800 and 2100 MHz bands. As a result of the auction conducted by the Bangladesh Telecommunication Regulatory Commission, Banglalink will acquire 5.6 MHz paired spectrum in the 1800 MHz band and 5 MHz paired spectrum in the 2100 MHz band. Banglalink will also acquire a LTE licence in parallel to launch a high-speed data network.

The spectrum is technology neutral and will allow Banglalink to double its 3G network capacity, Veon said. Banglalink will pay a total of USD 308.6 million (VAT excluded) for the spectrum. An upfront payment of 60 percent for the spectrum will be payable in 30 days, with the remaining 40 percent payable over four years. In addition, the company will pay USD 35 million to convert its existing spectrum holding in the 900MHz and 1800MHz bands into technology-neutral spectrum and USD 1.2 million to acquire the LTE licence. The investment will be funded through locally available cash and by the BDT-denominated facility signed by Banglalink in December 2017.

Market leader Grameenphone will pay BDT 12.84 billion for 5 MHz of the 1,800 MHz band. Grameenphone and Robi will also pay fees to make their existing spectrum holdings technology-neutral and to acquire 4G licences. 

Citycell also qualified to participate in the auction but did not buy any spectrum rights. In total less than 30 percent of the 46.4 MHz of spectrum put up for sale was bought in the tender. 

Shahjahan Mahmood, chairman of the BTRC, said the regulator was "not happy" with the results of the auction, the Daily Star report. He said that the operators will have another opportunity to acquire spectrum at the same price within the next six months. He expects they will need it in order to improve and expand services. 

TIM Nurul Kabir, secretary general of the Association of Mobile Telecom Operators of Bangladesh, who attended the spectrum auction in Dhaka as an observer, said the government could have earned more were the floor price lower.

The new licences will be issued on 20 February, the BTRC announced. All three operators said they are ready to start offering 4G services in major cities as soon as they have the licences. 

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