CAG slams BTRC’s free swapping of Airtel’s spectrum

Posted on June 4, 2013  /  0 Comments

It has a bit of background. Warid Telecom of Abu Dhabi had acquired the 6th mobile operating license in Bangladesh, through open auction at US$ 50 million in 2005. The license was bundled with 15 MHz. spectrum in 1800 MHz. band. Therefore, Warid paid $3.3 million per MHz. for the spectrum.

In 2008, the regulator has assigned 17.5MHz block of 1800 MHz. spectrum among three private GSM competitors of Warid at $11.6 million per MHz. Therefore, after three years the regulator has increased the unit price of 1800 MHz. spectrum by $8.3 million.

Next year, in 2009, Warid Telecom sold 70% stake to Airtel. The Indian mobile heavyweight found it requires too many base stations to deploy a nationwide mobile network using only 1800 MHz frequency. Therefore, it returned 5 MHz of its 1800 MHz spectrum and acquired equal amount of frequency in 900 MHz band in 2010.

And Bangladesh Telecommunication Regulatory Commission (BTRC) has charged nothing to Airtel for this swapping of “capacity (1800 MHz)” and “coverage (900 MHz)” bands.

Now, the Comptroller and Auditor General (CAG) thinks the government has lost Tk.12 billion (US$154 million) due to the spectrum’s free tradeoff with Airtel. The CAG has sought explanation from BTRC, according to a report of Dhaka Tribune.

However, the telecom regulator chief, Sunil Kanti Bose, claimed it was all a “misunderstanding” with the auditors. “We gave our reply to the CAG and there is nothing in the regulations about it (spectrum allocation process),” Sunil told the Dhaka Tribune in a recent interview. The government had in the past handed out spectrum on the 800, 900 and 1800MHz bandwidth for free. “It does not mean that the government made losses then,” Sunil said.

Airtel’s clarification to the newspaper is quite interesting:

Airtel declined to officially comment on the matter despite repeated attempts. However, a senior official, requesting anonymity, told the Dhaka Tribune in a meet at his office last week: “We are the first operator who paid for a license and at a high rate. So the government should show us that respect. Instead we are getting harassed by various sectors including the media.”

The official added that their license does not include any provision that says they have to buy the spectrum separately.

Full report of Dhaka Tribune is here. A recent presentation of BTRC on current and future of spectrum management in Bangladesh can be downloaded from here.

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