The Financial Express

BTRC to hold spectrum auction on March 8

| Updated: February 23, 2021 16:29:00

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Bangladesh Telecommunication Regulatory Commission (BTRC) is set to award spectrum or radio frequency between 1800 MHz and 2100 MHz bands to mobile phone operators through auction.

The auction will be held on March 08 but operators shall make queries within February 23 and submit applications for the spectrum on March 01.

The government is likely to earn around US$250 million from the auction.

"The government has decided to award the much-hyped spectrum in the first week of March," Post and Telecommunication Minister Mustafa Jabbar told the FE.

The auction guidelines set a floor bid price of US$30 million per MHz of spectrum in 1800 MHz band and US$27 million in 2100 MHz band.

The bid earnest money shall be Tk 10 million for the application of each spectrum band, payable in the form of pay order and bank draft, according to the guidelines.

The money of successful bidder(s) will be adjusted with the payable spectrum assignment fees while the bid earnest money of unsuccessful bidders shall be returned within 30 days of the bidding date without bearing any liability towards interest, indexation, inflation or deflation, according to the spectrum guidelines.

Earlier in February 2018, BTRC awarded spectrum for fourth-generation (4G) services as part of the government's plan to expedite the launch of 4G mobile services.

The guidelines for the spectrum auction 2021 said mobile voice and data traffic are increasing rapidly and generating huge traffic in mobile communication networks.

"Currently, assigned spectrums to cellular mobile operators are not sufficient to carry enormous traffic. So, BTRC is planning to award spectrum through auction," according to the guidelines issued to operators on February 18.

The government has earned about US$637 million as revenue from new 4G spectrum allocation and tech neutrality fees from Grameenphone, Banglalink and Robi, and NTT DoCoMo Inc. (Japan) in the last auction.

Chief Corporate and Regulatory Officer at Robi Axiata Limited Shahed Alam said payment for this year's spectrum auction is more flexible than that of the previous auction held in 2018.

"We had to pay total spectrum fees in three instalments but this time, we are getting five instalments," he told the FE.

The operators will have to pay 25 per cent of fees to the commission after winning bids. The rest of the money will be paid in five instalments in five years

The base price for auction of spectrum under these instructions is based on 15 years.

However, the auction winning price will be equally divided by 15 and the quotient will be multiplied by the number of the remaining years of the said licence from the date of assignment of spectrum and the outcome shall be treated as the actual payable spectrum assignment fee.

According to the guidelines, 7.40 MHz spectrum from 1800 MHz band will be auctioned in 05 (five) blocks and 15 MHz spectrum from 2100 MHz band will be auctioned in 03 (three) blocks, the guidelines said.

The country's mobile network operators are not using adequate spectrum to cover their customer base.

Mobile operators have one of the lowest allocated spectra against users.

For each megahertz (MHz) spectrum, there are 1,200,000 mobile phone users in the country, but each MHz spectrum is used by 300,000 in Nepal, which is geographically as big as Bangladesh.

In Sri Lanka, Malaysia, Thailand and Vietnam, 100,000 to 400,000 users share one MHz of spectrum, according to the telecom stakeholders' data disclosed in April last year.

According to the BTRC, Grameenphone, the country's largest mobile operator, has the lowest spectrum coverage for its users.

Over 2,000,000 Grameenphone subscribers are currently occupying each MHz of spectrum.

Robi Axiata Limited, the second largest operator, serves 1,400,000 subscribers with the same frequency while Banglalink has 1,100,000 users in each MHz of spectrum.

At present, Grameenphone has 37 MHz spectrum, Robi 36.4 MHz, Banglalink 30.6 MHz, and Teletalk 25.2 MHz in three different bands.

Due to a lack of spectrum, the quality of mobile service has started taking a turn for the worse as digital penetration, mobile broadband adoption, smartphone use and data traffic continue to rise sharply following the outbreak of coronavirus.

According to the BTRC data, some 1.12 billion call drops occurred during the period between January and August in 2020.

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