With two mobile phone operators having merged and another shutting down, the telecom regulator plans to welcome a new player when it holds spectrum auction to boost competition and enable digital services to flourish.
Robi and Airtel merged last year while Citycell, the oldest operator in Bangladesh, remained out of service for the last 10 months and its licence is due to be scrapped.
Hence, a six-player market has suddenly become a four-player one, dominated by Grameenphone, Robi and Banglalink who together control 97.3 percent of the market.
The remaining 2.7 percent market share is held by Teletalk, the lone state-owned operator, according to a report of Bangladesh Telecommunication Regulatory Commission (BTRC).
The last licence was given to Airtel in 2005.
At least one new entity is expected to emerge in the auction, said Shahjahan Mahmood, chairman of the regulatory body.
“One-third of the operators have left the market, and we are eagerly waiting for new players to enter,” he said.
The next spectrum auction might be held within two or three months.
The BTRC has drafted a guideline for fourth generation licencing which has created leeway for new entities.
Experts, however, say it would not be easy to attract new investors. Abu Saeed Khan, senior policy fellow at LIRNEasia, a think-tank based in Sri Lanka, said regulatory certainty is a must to attract new investors. “But there is no predictability in the sector.”
“Most importantly, competition has been exiled from the sector through regulations, which is a huge setback for the market,” said Khan, a former secretary-general of the Association of Mobile Telecom Operators of Bangladesh.
A top official of a leading mobile phone operator said not only the telecom regulation, there have not been adequate financial and taxation regulations related to the sector as well.
“That's why the existing operators are bleeding and there is no chance for a new operator in this field,” he added, requesting anonymity.
Khan said top global telecom giant NTT Docomo and Airtel shrank their businesses in Bangladesh which gives investors a negative signal.
NTT Docomo bought 30 percent of Robi's shares in 2008 but lost interest in investing more and diluted their shares in two phases. Now the Japanese company has only 6.3 percent stakes in Robi after the merger.
Warid started business in Bangladesh in 2006 but sold off 70 percent of its shares for $100,000 to Airtel.
Airtel bought the rest of the shares later and invested about Tk 10,000 crore and lost Tk 5,810 crore, according to a report of the Consumers Association of Bangladesh.
In the last 10 years, telecom operators were not allowed to establish any infrastructure and, apart from Grameenphone, none have optical fibre networks. Therefore, new operators hardly have any incentive to invest, Khan added.
At a meeting with telecom officials in May, Prime Minister's ICT Affairs Adviser Sajeeb Wazed Joy directed the BTRC to write to top global players to invest in Bangladesh.
BTRC officials said they have already communicated with one player but found it to be reluctant to come to Bangladesh. This made the BTRC more conservative in making new offers.
“After your report, this information will be disseminated among the interested parties. So there is no need to formally make any offer to anyone,” a top official of the BTRC told The Daily Star.
In 2013, before a 3G spectrum auction, the BTRC had created ground for a new player to enter the market but received no positive response, though there were six players in the sector at the time.
Experts said the market then was overcrowded so there was little scope for the arrival of new operators.
Source: http://www.thedailystar.net/business/regulator-wants-new-mobile-operator-1429603