“We need to see what the conditions are [for securing 3G licences] and resolve the pending disputes before we take a decision on 3G,” Sigve Brekke, Grameenphone's chairman, said in an interview.
Brekke, who was recently in Dhaka to introduce the company's new chief executive officer Vivek Sood, met with the finance minister, telecom secretary and Bangladesh Telecommunication Regulatory Commission's (BTRC) chairman -- to voice his concerns.
“I am a bit worried about the regulatory situation of Bangladesh. That should be sorted before the 3G auction is held,” he said.
The government and four of the mobile operators -- Grameenphone, Banglalink, Robi and Citycell -- are currently stuck in a tug-of-war over value-added tax (VAT) rebate for 2G spectrum licence.
When the operators renewed their 2G spectrum licences in August last year, they had to pay 15 percent as VAT on top of the renewal fee, a pay-out they did not have to bear the first time round.
The licence fee, previously, was inclusive of tax, with the proceeds split as 85 percent to the telecom regulator and 15 percent to the National Board of Revenue.
The operators individually went to court challenging the legitimacy of the 15 percent VAT, with Grameenphone getting the verdict in its favour. Robi, however, was denied the VAT rebate.
The BTRC and NBR then took the matter to the appellate division, where the case is still pending.
Then last year BTRC claimed upwards of Tk 3,000 crore as unpaid taxes and fees from Grameenphone, which the operator vehemently denied.
The operator placed a case to the High Court, with the verdict yet to be heard.
Brekke urged the government to reach out-of-court settlements for the issues before holding the 3G auction, for which the government has finalised $20 million as the base price and a 15 percent VAT on top.
“If not, it will be difficult for us to participate in the 3G auction. We need to be guaranteed a stable environment before we undertake investments of such scale.”
Brekke deemed the base price to be “excessive”, while adding that the VAT on the licence fee was “not logical” as the operators pay taxes for the services.
The company, which deems its voice business to be saturated and sees future growth coming from data transmission services, however, is excited about the advent of 3G service in Bangladesh.
“When 3G will come you will see explosion of data usage,” said the Grameenphone chairman, adding that the company has a 3G-ready network thanks to recent upgrades.
Brekke hopes the price of smartphones, needed to experience the best of 3G's capabilities, will become affordable for all with the roll-out of the service.
The company has seen its growth in subscriber base stagnate in recent months, and Brekke blames it on the SIM tax.
Regarding the employee outrage Grameenphone faced last year, Brekke said the company is in dialogue with the employees concerned to find an agreeable solution for all.
Brekke, who is also part of Telenor, Grameenphone's parent company's board, said the Norwegian telecommunication giant is now turning its attentions to Asia.
“There is tremendous scope for growth in Asia, in both the areas of voice and data,” he said, adding that about half of the group's revenues come from its Asian concerns.
Telenor, which already has operations in Thailand, Malaysia, Bangladesh, Pakistan and India, is now looking to enter Myanmar.
Global telecom companies are now eyeing the lucrative Southeast Asian country, which is aiming to expand its telephone penetration between 75 and 80 percent by 2016 from the current level of around 10 percent.
Myanmar's communications and information technology ministry has launched tenders for two mobile phone licences, to which Telenor has expressed its interest.
Regarding the group's growth prospects in its home region, Brekke said: “Growth in voice service there [in Europe] is over. While there is still scope for data growth, overall growth prospect is not promising.”
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