Telecom sector passes bumpy year

The country's telecom sector witnessed a bumpy year in 2019, marred by noisy arguments between the regulator and operators - Grameenphone and Robi - over audit claims of around Tk 130 billion.

It, however, showed some positive signs as there were initiatives to formulate 5G guidelines, provide Nationwide Telecommunication Transmission Network (NTTN) operator licence and develop International Mobile Equipment Identity (IMEI) number database, among others.

The four telecom operators obtained around 7.0 million voice and same amount of data subscribers in the first 10 months of this year though they lost half a million data subscribers in November alone.

Secretary general of the Association of Mobile Telecom Operators of Bangladesh (AMTOB) Brig Gen S M Farhad (Retd.) said that the industry's health became pale and vulnerable despite getting more than 7.0 million voice and 8.0 million data subscribers in the first 10 months of the year.

"2019 can be considered as a very disappointing and frustrating year for the telecom sector," he said, adding that a series of issues continued to rattle the industry - few of those were unprecedented.

Representing the country's telecom operators, he said that the industry was jolted with the announcement of the national budget, which imposed additional levies on voice and data services, and raised the minimum corporate tax by more than 2.5 times for the MNOs those are yet to reach the profit-making mark.

The audit claim of the Bangladesh Telecommunication Regulatory Commission (BTRC) has affected the whole industry, including the equipment suppliers and backward linkage industry, forcing network expansion to become stagnant as well as affecting the investment efforts.

Furthermore, since the TowerCo operators are yet to be operational, the mobile network operators could not expand the network during this period. "It has negatively impacted the overall service quality of the operators," Mr. Farhad said.

Following an audit, the BTRC in 2016 claimed Tk 125.79 billion from GP, leader in the country's telecom service sector, and Tk 8.67 billion from Robi, the second largest operator, in taxes and late fees accumulated over the several years. Of the total, the principal audit claim from Robi was around Tk 3.15 billion and around Tk 63.85 billion from GP.

In August this year, the mobile phone operators filed lawsuits with the Joint District Judge Court, challenging the legality of the regulator's claims.

However, a number of interventions by prime minister's ICT affairs adviser Sajeeb Wazed Joy, finance minister AHM Mustafa Kamal, National Board of Revenue chairman Md Mosharraf Hossain Bhuiyan, telecommunications minister Mustafa Jabbar, BTRC chairman Md Jahurul Haque have failed to solve the crisis. Both sides continued to blame each other.

In a recent development, GP's parent company Telenor sent a legal notice to President Abdul Hamid, demanding international arbitration to resolve the BTRC's 'disputed' audit claim of Tk 125.80 billion, and in reply, the attorney general's office of Bangladesh said they cannot do it as the matter is now in the Supreme Court.

On the other hand, mobile operator Robi said that it wanted to withdraw all the cases against the auditing process and sought arbitration to solve the matter.

However, telecommunication minister Mustafa Jabbar said that if the telecom sector passed a bad year, they are themselves responsible for it. "If they have done damages to themselves, we can't do anything for them," he said, adding: "If the telecom service is bad, they are responsible for it."

He further said: "If the operators do not improve network, do not purchase necessary spectrums, do not install Base Transceiver Station (BTS), do not comply with the government and pay dues, they would suffer for it … their service would go down."

Mr. Jabbar said the operators cannot say that the government initiated the crisis and raised a question as to why the operators would not pay; it is not that they are not making profit. "The operators repatriated more money abroad than what they had invested in Bangladesh."

He further said that the government should investigate to find out how much money they gave as dividend and the amount they repatriated against the investment. He again blamed operators for the restriction on NOC as they went to the court.

"We didn't go to court, they went there and now we can't do anything bypassing the court," he added.

The minister said that if GP pays Tk 20 billion today as per the court's verdict, the government would withdraw restriction on new NOC, which bars operators to expand their network and to invest afresh.

He also said that the telecom sector has achieved a lot this year. "The achievement is not little … the ministry achieved a lot in one year - BTRC, BTCL, Teletalk, Submarine Cable all did well in one year."

Experts, however, observed that the row over the audit claims between the regulator and the operators would likely to affect the foreign investment in the country.

Foreign Investors' Chamber of Commerce and Industry (FICCI) president Rupali Chowdhury said the dispute is "unfortunate". She said that the ongoing row over the audit dispute portray a negative image of the country. "We do not want it."

Ms. Chowdhury said, "We can't undo the past … whatever happened, had happened. The matter should be resolved now through discussion and arbitration."

"Seeing the dispute, the new foreign investors would think there is a lack of transparency and clarity in the law," she said, adding that it would have negative impact.

The FICCI president said that there must be clarity in the law and rules before introduction of any new industry in the country. She thought that the crisis lies in the interpretation of the law.

"Both sides are interpreting the related laws differently. Now the resolution can come only through discussion," she added.

[email protected]