Since January 2010, the head of BTRC started planning for 3G licensing and stated the operating licenses would be issued in August 2010, which attracted a number of international telecommunication companies’ interests at that time. However, August 2010 came without the regulator committing to an auction. Despite this, the state-run Teletalk proposed launching 3G services ahead of other private mobile operators.
In April 2011, both government and mobile operators started to negotiate the 2G licensing renewal, with the 3G spectrum auction having been held up for a long time. After the 2G license renewal, the regulator came to consider 3G licensing again and decided to hold the auction in September 2012. The initial intent was to allocate one concession to state-run operators, three to private operators, and one to a new foreign entrant. But the scheduled September 2012 auction was put off again until 2013 due to the belated settlement of 2G license renewal. The 3G licensing delay, along with 4G licensing, might deter the potential of introducing new technology and foreign investment.
Things did not go as smoothly as expected. Since the National Board of Revenue (NBR) in Bangladesh planned to charge a 15% tax over the radio spectrum payments, the mobile operators refused to take part in the auction until the tax rate could be reduced to an acceptable level. After several rounds of postponements and arguments, the auction finally took place on September 8, 2013, based on the premise that the Value Added Tax (VAT) on 3G spectrum fees would be lowered to 5%. Both the high average corporate tax rate (52.5%) and regulation uncertainties in Bangladesh could frighten foreign investors away, enticing no foreign entrants to the Bangladesh mobile markets. Since Bangladesh is in the critical moment of mobile technology development, the government should learn to efficiently allocate natural sources (like spectrum) and attract necessary investment, rather than take advantage of political power to seize more money from companies.
On September 8, 2013, the Bangladesh Telecommunication Regulatory Commission (BTRC) announced that its four local private mobile operators had been assigned 3G spectrum in the 2.1 GHz band. The spectrum could also be applied for 4G services. The regulator has collected BDT40.8 billion (US$525 million) from the auction, while the spectrum fee per (paired) MHz is US$21 million. However, 2 x 15 MHz spectrum was left unsold, worth the price of US$315 million.
