To encourage investment and technological advancement in the country’s telecommunications sector, the government has indicated the possibility of offering a conditional price reduction of up to 10% for the 700 MHz spectrum auction. Additionally, it has justified the dollar-based pricing benchmark as a realistic approach.
In response to concerns raised by global investors in the telecom sector regarding the auction criteria for the 700 MHz band, the government has provided explanations addressing various aspects of the issue.
A letter detailing these points was sent on Tuesday by Faiz Ahmed Tayyab, Special Assistant to the Chief Adviser, who is currently overseeing the Ministry of Posts, Telecommunications, and Information Technology.
Investors’ Concerns and Govt’s Justifications
On March 16, major investors of Grameenphone, Robi, and Banglalink sent a letter to Faiz Ahmed Tayyab. In response, he stated that considering the slow growth of devices supporting the 700 MHz band, the government is open to reasonably considering a 5%–10% price reduction. However, this will depend on the operators’ commitments toward infrastructure development, quality service for citizens, and competitive pricing strategies.
Addressing concerns regarding spectrum pricing, Tayyab noted that the Bangladeshi Taka has depreciated by approximately 40% against the US dollar over the past three years. Taking this currency devaluation into account, he emphasized that the current spectrum valuation remains aligned with market conditions.
“Bangladesh’s telecom sector has significant foreign ownership, and investor companies generally remit their profits in US dollars. Thus, a dollar-based spectrum valuation is an effective method, as it mitigates exchange rate risks and maintains alignment with international standards,” said Faiz Ahmed Tayyab.
The letter also highlighted the importance of ensuring an adequate supply of spectrum for operators. While concerns have been raised about only 25 (2×25) MHz of the available 45 (2×45) MHz band being included in the auction, the government is carefully considering this matter. Authorities are working to release the remaining spectrum in a manner that is both technically and commercially viable.
Role of the 700 MHz Band in 4G and 5G Expansion
Tayyab described the 700 MHz band as a premium frequency for 4G and 5G expansion, offering significant advantages due to its wide coverage and low frequency. Currently, around 50% of 4 G-enabled handsets support the 700 MHz band. However, in a strategic move, the Bangladesh Telecommunication Regulatory Commission (BTRC) has decided that no new mobile handsets will be allowed in the market unless they support the 700 MHz band.
This initiative is expected to significantly increase the number of 700 MHz-compatible devices in the coming quarters, playing a crucial role in expanding 5G and improving digital connectivity.
Challenges in Spectrum Utilization and Internet Pricing
The letter further pointed out disparities in spectrum utilization across different frequency bands. While the usage rate of low-frequency bands stands at 84%–98%, high-frequency bands are utilized at a much lower rate of just 7%–18%. This imbalance indicates that the expected capacity enhancements in high-frequency bands have not yet materialized due to gaps in the deployment of baseband units and radio resource units.
As a result, service quality remains inconsistent, leading to slow internet speeds, unstable connections, increased call drops, and overall poor user experience. Moreover, the high cost of internet packages continues to be a major barrier to increased internet adoption.
Tayyab also criticized the short validity period of national internet packages, which has sparked widespread criticism. He suggested that this practice appears to be a deliberate attempt by operators to artificially limit internet usage growth.
Govt’s Commitment to Digital Equity
Emphasizing the need for effective utilization of spectrum as a national resource, Tayyab stated that the government is committed to ensuring uninterrupted capacity layers by deploying necessary infrastructure, reducing internet costs, and addressing digital inequalities. The government plans to engage with all stakeholders in the sector to take necessary steps in this regard.
From Faiz Tayeb Ahmed’s Facebook profile
