Nil value to Sing Tel’s Bangladesh investment

Posted on November 27, 2013  /  1 Comments

Under Sri Lanka’s law, if an operator goes out of business, the Director General of Telecom has to run it. This used to be one of my nightmares. I knew how to regulate, but did I know how to run a company? The Daily Star paints a grim picture of Citycell, a Bangladesh CDMA licensee. So grim that I should feel sorry about reiterating criticism of the discounting of their payments by the government when the licenses were up for renewal.

Asked about the company’s financial state, Mehboob Chowdhury, chief executive officer of Citycell, said the operator is close to receiving fresh funding with which it would be able to turn around its fortunes.

Citycell is 45 percent owned by Singapore’s SingTel, 31.43 percent by Pacific Motors Ltd and 23.57 percent by Far East Telecom Ltd.
SingTel stopped injecting funds into the company in 2012, and according to its 2013 annual report it placed a nil value to its ownership stake in Citycell.

The report says that BTRC is planning to advise 1.3 million Citycell customers to move to another network. But is there another CDMA network to move to? Is number portability in place? These are the questions I wish the Daily Star report also answered.

1 Comment

  1. In 2007, I was leading a strategic management research for SK Telecom. The objective of this research was to assess the Telecom sector of Bangladesh and detect investment opportunity for SK Telecom. At the outset, SK expressed interest to buy equity stake of CityCell. Our research predicted continued erosion of market value of CityCell. Based on such prediction, SK was strongly advised not to buy any equity of CityCell. It seems that our such research finding is becoming true. Let me appreciate SK for listening to our advice.