Dhaka, Bangladesh Global: The state coffer has been deprived of Tk 69 crore for the telecom regulator's failure to collect the 5.5 percent of the sales price of Summit Tower's acquisition of Banglalink's 2,000 mobile towers.
According to Bangladesh Telecommunication Regulatory Commission (BTRC) regulations, infrastructure or network equipment licence holders must pay 5.5 percent of the sales price when transferring ownership of their assets to another party.
In December last year, Banglalink sold 2,000 towers to Summit Towers, a subsidiary of Summit Communications, for Tk 1,100 crore. As per the rules, Banglalink was supposed to pay the regulator Tk 69 crore, including a 15 percent value-added tax, for the transaction.
The incident is yet another case of the telecom regulator failing to impose fair charges on companies, ultimately denying the government its due revenue.
The BTRC's November 2021 circular is unequivocal regarding the 5.5 percent revenue share and 15 percent VAT on infrastructure sales, with minimal scope for misinterpretation, said Abu Nazam M Tanveer Hossain, a telecom expert.
For instance, after the fall of the previous Awami League government on August 5, the telecom regulator walked back on its decision just two months earlier to allow Summit Communications to transfer its shares without the 5.5 percent fee.
On June 12, the BTRC allowed Summit Communications to do the share transfer without any charges. However, on August 14, the BTRC sent a letter to Summit Communications directing it to pay 5.5 percent of the selling price of the shares. Summit Communications furnished Tk 10.24 crore to the regulator after the BTRC letter.
The BTRC is investigating why charges were not imposed on Banglalink for the tower sales, said Musfiq Mannan Choudhury, the BTRC's commissioner for finance and accounts.
"We have just received a demand note from the engineering and operations division (of the BTRC) to levy a charge on Banglalink for its tower sales. We are currently looking into why the charge was not collected earlier," he told.
However, telecom experts urged the regulator to revoke such unnecessary fees that would discourage foreign investment in Bangladesh's telecom sector which has seen the exodus of global names over the years like Japan's NTT DoCoMo, Orascom Telecom Holding, SingTel and Dhabi Group (Warid Telecom). In 2016, India's Bharti Airtel merged with Robi since its operation in Bangladesh as a separate company had become unviable.
Banglalink, the country's third-largest mobile operator, is owned by the Dutch-domiciled telecommunications service provider VEON.
For licensees, the imposition of such fees during the licence period can undermine business plans and invite challenges, the telecom expert Hossain said.
A strategic, long-term policy approach from the BTRC is crucial to maintaining market attractiveness for both local and international investors, as such abrupt changes can erode investor confidence and destabilise the market, he added.
"We shall also work with the BTRC to understand the details as we believe that tower-sharing guidelines should be reformed as the commercial freedom of all parties was not fully addressed. There are anomalies related to the obligations during sale and proceeds," Banglalink said.
When asked whether the 5.5 percent charge on selling equipment is justified or suitable for business, Md Emdad ul Bari, the new chairman of the BTRC, said: "There's no doubt the government needs revenue. Similarly, taxes should be balanced with the profitability of businesses."
"As telecom has become a vital artery for development, we should also assess its indirect benefits. If we quantify these, I believe taxes can be made more rational," he added.
Bangladesh Global/JS
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