The New Nation - Internet Edition

ECONOMIC REPORTER

Three local telecom companies have won international call service licences breaking the decades-old monopoly by the state-run BTTB, officials said.

Novotel Ltd, Bangla Trac Communications Ltd and Mir Telecom won the licences offering 51.75 per cent of their call tariffs to the Bangladesh Telecommunication Regulatory Commission (BTRC) after a 26-hour long auction at Radisson Water Garden Hotel Dhaka on Tuesday, BTRC spokesman Abbas Faruq said.

"All three will be given licences in ten days after they complete formalities. Their arrival ushers in a new era in the country's telecom sector. It also breaks the decades-long monopoly of the BTTB," he said.

Faruq said these three companies would be given international gateway licences for 15 years under the International Long Distance Telecommunications Policy 2007. The licences are renewable.

This is the first time in the country's history telecom licences were auctioned off in front of an open house. BTRC chairman Maj Gen (Retd) Manzurul Alam said it was done to ensure 'complete transparency.' The BTRC chairman said that the government would get revenues worth TK 1,000 crore a year from the sector. The existing revenue earning is around Tk500 crore a year.

The three companies have to deposit Tk 15 crore in licence fees each in 10 workdays from the day of bidding. Every year each firm will have to deposit Tk 7.5 crore for renewal of licence.

Though 31 companies took part in the auction that ran a non-stop 26-hour before the three companies were declared winners after they offered the highest tariff.

The three are the newcomers in the country's growing telecom sector, with Mir Telecom being the only one owned by a well-known group.

Former head of the country's top chamber FBCCI Mir Nasir Hossain owns the Mir Telecom. Novotel is owned by lesser known textile company, Tusuka Fashions, and Bangla Trac, an importer of generator and heavy equipment, is led by Tarique-e-Haque.

Mir Nasir hailed the auction, saying their offer 'makes sense'.

"International call is a growing market. We think our offer will be viable and we will be able to make some profit," Nasir, who also leads the Mir Group, said.

"We also thank the BTRC for conducting the country's most transparent bidding in history," he said.

His company would now invest nearly Tk 1.00 billion to start operation within the next six months. "We have already started negotiations with equipment makers."

The auction brings an end to the long-held monopoly by the state-owned fixed phone operator Bangladesh Telegraph and Telephone Board (BTTB).

Protected by the government's telecom laws, the BTTB was the sole carrier and router of international phone calls since the country's independence in 1971.

But lack of government policing meant private mobile and fixed-phone operators illegally grabbed a huge share of the market, by using Voice over Internet Protocol (VoIP) technology since it became popular in 2001. The BTRC has already fined four top mobile phone operators including the country's largest Grameenphone some Tk 6.15 billion for illegally transferring international calls in the country.

The regulator said the entry of the three new private operators would ensure a sizable tariff for the government.

"The government will now have a good slice of the ever-growing pie," Faruq said, adding the three companies will have to pay Tk 150 million each as licensing fees.

The country's international call market is about 25 million minutes a day, with 80 percent traffic home bound, a BTTB official said, adding more than 50 per cent of the market is being illegally grabbed by VoIP operators .

"The market is worth Tk 30 billion and it is growing rapidly because of the huge exodus of Bangladeshi workers," he said.

More than five million Bangladeshis now work and live abroad and officials have projected another one million to leave the country this year.

An expert said the 51.75 per cent revenue sharing is a 'very good business deal' should the government completely stop illegal VoIP use.

"The companies made an excellent deal. It looks very much viable to me," said the expert, who is associated with the international call services for years.

"But the government should clampdown on illegal call transfer business by some of the leading mobile and land phone operators. These illegal operators are eating up the bigger slice of the pie," he added.

Mir Nasir, however, said privatisation of the international long distance call service would lead to a price war among the legal carriers, drying up the source of revenues for the illegal VoIP operators.

"Illegal VoIP operators thrived because of the protection enjoyed by BTTB. But as soon as the private companies start operation, it will be impossible for these illegal operators to stay afloat," he said.