Saturday, January 14, 2012

Telecommunication sector under threat

The latest news in the telecom sector is "International Terrestrial Cable (ITC) license holders will be allowed/issued International Internet Gateway (IIG) license by default." The ITC license holders have already had meetings with the Ministry of Post and Telecommunication (MoPT) and Bangladesh Telecommunication and Regulatory Commission (BTRC) on the matter.

The reason they have shown in issuance of IIG license in their favour is that, as Bangladesh Telecommunication Company Limited (BTCL) and Mango Teleservices Limited (Mango) are holding both IIG and ITC licenses, if they are not given IIG license then they don't have any valid business case with ITC license only. One may be surprised to know that MoPT and BTRC may be considering such a request.

Issuance of the IIG license to ITC license holders would clearly cause procedural and legal difficulties for which the government/BTRC could come under questioning. If ITC license holders are of the opinion that BTCL and Mango are a threat to their business and they don't have any valid business case with ITC license only, then we may conclude that these five ITC license holders have submitted incorrect/wrong business documents/

feasibility reports without assessing their business risk factors; or they don't have any clear idea regarding ITC business; or BTRC/MoPT have failed to assess bidders properly and awarded these license wrongly. Before bidding, these ITC license holders knew that BTCL as an incumbent would be allowed one ITC license by MoPT/BTRC and Mango, as a prospective bidder for ITC license and as per the ILTDS Policy-2010, would also be awarded ITC license.

If the decision is taken to give IIG licence to ITC license holders, the telecom sector will face a lot of difficulties.

Since the independence of Bangladesh, the governments and the regulator have never entertained any such unjustified request of any license holder or acted with the policy "one type of license is free if you are awarded another type of license." Thus, it would be unwise for MoPT/BTRC to consider dependency of one license on the other license (i.e. ITC license impact on IIG license or vice versa). Issuance of IIG license to these ITC license holders would just create a very bad precedence.

The application for BWA/WiMax license by Mango Teleservices Limited is under processing by MOPT/BTRC. Mango is holding IIG & ITC license too. Thus, if the ITC license holders are awarded IIG license, then existing BWA/WiMax License holders, i.e. BanglaLion and Augure (Qubee), may also claim IIG and ITC license by default from the MoPT/BTRC. In addition, Mango Teleservices Limited and the two other ITC license holders would also claim for NTTN License by default from MOPT/BTRC, as Summit Communication Ltd. and Fiber@Home are currently holding NTTN and ITC license.

If the existing five ITC license holders are awarded IIG license by the MOPT/BTRC, then the other prospective bidders for IIG License may go to court for third-party remedial measures. It would just stop the whole procedure for the issuance of these licenses.

Issuance of IIG license to the existing ITC license holders would also create a monopoly business environment, because of which the subscribers would suffer at the end of the day. It is now clear that these five ITC license holders have already made a consortium and are asking for undue favour from the MoPT/BTRC. They would also work as a consortium regarding tariff. But we have seen that the subscribers never get benefit from such business consortiums.

Issuance of unjustified IIG license and/or any other license (IGW, ICX, WiMax, etc) would just promote illegal business activities by those operators as there would be no valid legal business case. We may refer PSTN business case in this regard.

Issuance of IIG, IGW, ICX, ITC, NTTN, WiMax license to the existing license holders would be a clear violation of the spirit of the original ILTDS Policy (ref ILTDS Policy 2007), which encourages democratic participation in telecom sector and discourages monopoly. This would create an unhealthy business environment, because of which the whole telecommunication sector would suffer.

These five ITC license holders, in addition to the IIG license, have also applied for IGW, ICX licenses. Now, if they are awarded IGW and ICX license, then the existing IGW License holders (BanglaTrac Telecommunication, NovoTel & Mir Telecommunication) and ICX License holders (Getco Telecommunication & M&H Telecommunication) could also ask for IIG licenses. Which, in turn, would promote more monopoly business environment and no new entrepreneur would be allowed to enter this sector.

MoPT/BTRC should not, under any circumstances, promote any entity for doing monopoly business, or do anything that is not in line with their policy.

First Published: The Daily Star, 14 Jan, 2012

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