Telecom kingpin VEON wants suitable policies for fresh investment

Dhaka,  Thu,  20 July 2017
Published : 16 Jul 2017, 13:48:06 | Updated : 16 Jul 2017, 13:51:29
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Telecom kingpin VEON wants suitable policies for fresh investment

4G regulations, tower-licensing guidelines have to be investor-and consumer-friendly: VEON boss
Mehdi Musharraf Bhuiyan
With fresh investment plans in newer digital services in telecommunications, a major mobile-phone multinational operating in Bangladesh awaits both investor-and consumer-friendly guidelines regarding 4G and spectrum allocation and tower licensing.

Government regulations regarding 4G and spectrum need to be both 'investor-friendly and consumer-friendly' to ensure better service quality as well as a level playing field on the telecom market, said the global head of the mobile operator.

Simultaneously, the government should also finalise the tower- licensing guidelines and enable the mobile operators to dispose of their tower portfolios to let them focus on new digital services, said Jean-Yves Charlier, the CEO of Banglalink's parent company VEON.

Mr Charlier, who was on a visit to Dhaka, shared his views on a number of pressing issues within the country's telecommunications sector in an interview last week.

The VEON CEO's visit took place at a time when the company plans to invest over US$ 1.0 billion in its Bangladesh business expansion over the next three years.

"Much of this investment will be channelled in boosting our spectrum, network coverage and digital services," Mr Charlier said.

His trip also coincided with government's recent issuance of the draft 4G Guidelines and the draft Spectrum Guidelines which are now hot topics within the country's telecom industry.

The spectrum guidelines have already set the base price for additional spectrum to be in the range of US$ 27 million to US$ 35 million, depending on the bandwidth.

Focusing on this pricing, the VEON top boss observed that this is on the 'higher side of what we see in benchmarks across Asia or Europe'.

"For example, in Europe, the price of spectrum is US$ 10 million per megahertz while in Asia it is around US$ 17 million," he said.

"So, obviously, a balance needs to be there between the coverage obligations and coverage intensions when it comes to 4G framework, and we are in continuous dialogue with the regulator on what that appropriate balance can be," the VEON CEO added.

"We want to ensure that the relevant guidelines are pro- investment and pro-consumer in their approach and we want to have a constructive dialogue with the government and the regulator on these issues."  

While hailing the government move to introduce 4G in the country, the VEON boss also emphasized ensuring spectrum availability beforehand to create a level playing field for all.

Meanwhile, Banglalink recently applied for additional spectrum on 2100MHz but BTRC ultimately rejected that request for direct spectrum assignment.  

Mr Charilier said allocation of spectrum is a critical issue for Banglalink as currently it is the operator with the least amount of spectrum on the market.

"To serve a significant number of customers with minimal amount of spectrum is a big challenge, which has also a negative impact on the whole telecommunications sector," he added.  

"Therefore, we look forward to working with the regulator on securing the additional spectrum at the earliest opportunity, either directly or through auction."

The draft 4G guidelines have reportedly also stipulated that the licensees will have to offload shares on the capital market.

Focusing on this conditionality, Banglalink CEO Erik Aas, who was also present during the session, said: "Regulations regarding stock market also stipulates that a company that goes for stock-market listing needs to have a profitable business."

He added: "Although, we made a marginal profit of Tk 2.8 billion last year, overall, we have made accumulated losses of around Tk 44 billion over the years."

The CEO of VEON also called for quick finalization of tower- licensing guidelines that would allow mobile operators to dispose of their tower portfolios.

"In keeping with industry trends, we are looking to dispose of our tower portfolio in each of our markets as we no longer consider this asset as core to our business

"Such move will also allow us to unlock precious capital and further invest in our spectrum portfolio, networks and digital initiatives," he said.

Headquartered in Amsterdam, VEON is operational in around 12 countries around the world with a combined subscriber base of more than 235 million.

VEON's local subsidiary Banglalink started its journey in Bangladesh more than a decade ago. Currently, it has more than 31 million subscribers across the country. According to Banglalink officials, it has invested around US$ 2.5 billion since its inception in Bangladesh.

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