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BTRC amends licencing clauses to bag more FDI

| Updated: December 09, 2021 09:51:33


BTRC amends licencing clauses to bag more FDI

The country's telecom regulator has amended clauses for its 21 types of licences to open the sector for more foreign direct investment (FDI).

According to the draft circular - issued on Sunday, from now on, licences will be issued to all, irrespective of Bangladeshi (resident citizens, non-resident Bangladeshis or NRBs, proprietorships, partnerships under the Partnership Act 1932, and companies registered under joint stock companies and firms under the Companies Act 1994) or foreign entities (citizens, companies or subsidiaries or holding companies).

Foreign partnership or joint venture will also be permitted, the amendment noted.

The Bangladesh Telecommunication Regulatory Commission (BTRC) will accept opinions on the draft guideline for 10 days.

Previously, there were clauses for limited FDI for only eight types of licences, including cellular mobile services, NTTN, submarine cable system and services.

As per the amended guidelines, the entity concerned will invest foreign currency directly - according to its percentage of ownership, and it will not be allowed to take any loan from any Bangladeshi scheduled bank, financial institution and leasing company.

After fulfilment of rollout obligation and if loan is required for operational purpose/business expansion, the entity can take maximum 20 per cent of its total loan from any Bangladeshi scheduled bank, financial institution and leasing company.

In that case, the entity will take prior permission from the Bangladesh Telecommunication Regulatory Commission (BTRC), the amended guideline mentioned.

It also said the existing licensee - having loan amounting to more than 20 per cent of its total loan from any Bangladeshi scheduled bank, financial institution and leasing company - will reduce the loan to 20 per cent within five years from the date of amendment of the guideline.

As per the draft amendment, the foreign entity will comply with all the rules, regulations and instructions of the Bangladesh Bank, the Bangladesh Investment Development Authority (BIDA) and any other authority concerned of the country.

The licences that the BTRC proposed for amendments are: cellular mobile services (2G, 3G, 4G/LTE), 4G/LTE cellular mobile phone service, 3G cellular mobile phone services, 2G cellular mobile phone services, nationwide telecommunication transmission network (NTTN), internet service provider (ISP), international gateway (IGW) services, telecom value added service (TVAS), mobile number portability service (MNPS), submarine cable systems and services, tower sharing services, vehicle tracking service (VTS), broadband wireless access (BWA) services, PSTN operator licence 2004, international terrestrial cable (ITC) services, voice over internet protocol (VoIP) service provider (VSP), internet protocol telephony service provider (IPTSP) services, national internet exchange (NIX) services, international internet gateway (IIG) services, and interconnection exchange (ICX) services.

However, the draft guideline eased clauses for licences of NIX services and ISP service.

"No revenue will be shared for local investment for these two types of licences," the draft proposed.

"In case of foreign investment and/or having foreign investment along with local investment, the licencee will pay a sum equivalent to 5.5 per cent of the annual audited gross revenue (AGR) of the foreign investment, part of which will be paid on a quarterly basis within the first 10 (ten) days at the end of each quarter."

It also proposed that one per cent of the annual audited gross revenue of foreign part will be paid on a quarterly basis as social obligation fee within the first 10 (ten) days at the end of each quarter.

In the event of any over payment by the licencee, the company may set off the excess amount against quarterly payments next year with prior permission from the BTRC.

"The percentage of subscription to social obligation fund (SOF) may be changed from time to time by the government. There will be no social obligation fee for the local investment part," the draft added.

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