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Bangladesh 3G: Five operators; four licenses, floor price of USD 20 million per MHz

One more qualified bidder than number of slots is a prescription for a bidding frenzy. But then, something like this has been done before. In the UK they had one more slot than there were existing operators. The consequences of being the only 2G operator who failed to get a 3G license drove up the prices. That should do it in Bangladesh too, unless someone comes up with a clever solution. The very fact that the UK auctions happened more than a decade ago and have been studied to death reduces the chances of the UK outcome being repeated.

The telecom ministry has proposed $20 million for per megahertz spectrum as the starting price in the 3G spectrum auction early next year.
State-owned mobile operator Teletalk will get a licence without participating in the auction, while five local private operators along with foreign firms will fight for the rest four licences.
Winners will be able to pay the spectrum charges in two instalments — the first one at 60 percent and the final one at 40 percent.
Telecom Secretary Sunil Kanti Bose said the proposal on the floor price was sent to the finance ministry recently for its approval.
The telecom ministry yesterday sat with stakeholders, including the mobile operators, for the second time to discuss the 3G (third generation) guideline and the auction process.
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 floor price for the auction at $30 million for per MHz and suggested the operators should buy at least 10 MHz spectrum.


4 Comments to Bangladesh 3G: Five operators; four licenses, floor price of USD 20 million per MHz

  1. Abu Saeed Khan's Gravatar Abu Saeed Khan
    October 22, 2012 at 8:10 am | Permalink
  2. mahesh9910's Gravatar mahesh9910
    October 23, 2012 at 5:07 pm | Permalink

    this is the best way to allocate scares resources. However, cannot accept the fact that the goverment operator is not part of the auctioning process and as a result there could be an arbritage as the cost structure different for the governmemt operator.

  3. mahesh9910's Gravatar mahesh9910
    October 24, 2012 at 1:17 pm | Permalink

    Even the government can use the government operators to increase the price of the licence in the bidding process if properly managed. I know it is happening in money market where government use government controlled funds to control the policy rates.


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