Anisul Islam Noor :
The government is contemplating 15 percent revenue sharing with the mobile operators for 4G networks in the next fiscal year from existing 5.5 percent, sources said.
At present, the mobile operators share 5.5 percent of their gross revenue from 2G and 3G services with the Bangladesh Telecommunication Regulatory Commission (BTRC). They also forward 1 percent of their proceeds as contribution towards the social obligation fund.
However, the Association of Mobile Telecom Operators of Bangladesh (AMTOB) has opposed it in a letter to the Post and Telecommunication Ministry saying that any increase in revenue sharing will make the business case for 4G totally unviable.
Finance Minister AMA Muhith has recently hinted that auction of the 4G spectrum will take place after the announcement of the national budget for the next fiscal year.
A source close to Finance Minister said a plan is under process to raise VAT both for voice and data services of the mobile operators in the upcoming national budget.
Besides, the ministry plans to charge separate VAT for voice call and internet services in the budget, the source said preferring anonymity.
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.
It is also pertinent to highlight that technology-based revenue sharing is impractical and unworkable, they 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 AMTOB letter mentioned.
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, sources added.
“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 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 mobile 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.
Currently, 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 State Minister for Post and telecommunications Tarana Halim to voice their objection.
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 services since 2013 but they are yet to recoup the cost, let alone make any profit in the 3G segment, they said.
As of February, there are around 6.31 crore mobile internet users in Bangladesh, around 3 crore of whom use 3G services.
4G services, which offer broadband mobile capabilities, are available in all the neighbouring countries sans Bangladesh.
The government is contemplating 15 percent revenue sharing with the mobile operators for 4G networks in the next fiscal year from existing 5.5 percent, sources said.
At present, the mobile operators share 5.5 percent of their gross revenue from 2G and 3G services with the Bangladesh Telecommunication Regulatory Commission (BTRC). They also forward 1 percent of their proceeds as contribution towards the social obligation fund.
However, the Association of Mobile Telecom Operators of Bangladesh (AMTOB) has opposed it in a letter to the Post and Telecommunication Ministry saying that any increase in revenue sharing will make the business case for 4G totally unviable.
Finance Minister AMA Muhith has recently hinted that auction of the 4G spectrum will take place after the announcement of the national budget for the next fiscal year.
A source close to Finance Minister said a plan is under process to raise VAT both for voice and data services of the mobile operators in the upcoming national budget.
Besides, the ministry plans to charge separate VAT for voice call and internet services in the budget, the source said preferring anonymity.
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.
It is also pertinent to highlight that technology-based revenue sharing is impractical and unworkable, they 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 AMTOB letter mentioned.
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, sources added.
“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 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 mobile 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.
Currently, 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 State Minister for Post and telecommunications Tarana Halim to voice their objection.
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 services since 2013 but they are yet to recoup the cost, let alone make any profit in the 3G segment, they said.
As of February, there are around 6.31 crore mobile internet users in Bangladesh, around 3 crore of whom use 3G services.
4G services, which offer broadband mobile capabilities, are available in all the neighbouring countries sans Bangladesh.
