Talk that yields results in Bangladesh

Posted on November 11, 2010  /  4 Comments

Cynics among us decry the endless seminars and workshops and conferences that seem to be unavoidable feature of business and political life. But if the Bangladesh Daily Star has reported it accurately, the recent seminar on the Bangladesh telecom sector has actually achieved significant results.

One of the major problems in Bangladesh is the lack of certainty about whether or how the licenses of four leading mobiles operators, which expire in 2011, will be renewed. Economic theory and common sense say that unless an investor knows how long he has an asset, he will not invest in it. Thus, theory would predict a steep decline in investment in each of the networks as they approached 2011. This is bad, given the enormous potential for growth in the Bangladesh market, especially in enabling Digital Bangladesh through wireless platforms. A necessary condition for Digital Bangladesh is the release of 3G frequencies and the announcement of a roadmap regarding 4G.

Yet, paradoxically, auctioning or otherwise giving 3G frequencies at this point would create more problems that it would solve. What would an operator who did not know whether he would have a 2G network in a few months do with 3G frequencies? What would a newcomer bid for 3G frequencies, not knowing whether the current 2G operators would be in the game or not?

This is the question the speaker from Asian Tiger poses:

“For instance, there is a lack of clarity about the renewal process or cost of the licences of four telecom operators which will expire in 2011 and at the same time the process and timing of 3G licensing,” Islam said.

“This needs to be resolved quickly if future investment plans by the telecommunication companies are not to be delayed.”

And, he gets a response, right then and there:

Sunil Kanti Basu, post and telecommunications secretary, said: “As security will remain a top issue while assuring people’s access to mobile phones, the government will obviously keep in mind the need for making it available to a greater segment of the young population.”

Not specifying any timeline for issuing the guidelines for 3G licences, Basu said: “To facilitate the operators, we want to make sure through the regulator that 3G is not issued before the renewal of the operators’ licences.”

Not the optimal answer, which would have been a timetable and specific criteria for license renewal coupled with a 3G auction procedure and schedule, but still, not bad.

More good stuff, including a silly statement about the future of mobile continuing to be voice here.