Fees loom over Airtel-Robi merger

The Telecom Division yesterday sent its recommendations along with a proposal for fees on the merger of mobile phone operators Robi and Airtel to Prime Minister Sheikh Hasina for approval.

"This is the first time we are handling such a big merger. So we sent our recommendations to the prime minister, highlighting some points to follow from similar instances in neighbouring countries," said State Minister for Telecom Tarana Halim.

In November last year, India's Supreme Court charged Vodafone about $300 million over its plan to merge four regional subsidiaries in preparation for a long-awaited initial public offering. Bangladesh may follow this example, said a senior official of the Telecom Division.

The Telecom Division has endorsed most of the proposals made by Bangladesh Telecommunication Regulatory Commission.

The government will file the merger proposal with the High Court next week, after receiving the prime minister's consent, who is also the telecom minister.

In its recommendations, the Telecom Division cited several examples from India on fixing the fees for mergers and acquisitions, an official said.

The Telecom Division proposed a charge for number planning, as the merged entity will use '018' and '016' and get privileges over the other players. They have to pay some charges, which the Finance Division can fix, according to the official.

The Finance Division can also charge for the merged company's huge advantage in gaining a large spectrum capacity, the official said.

In March, the BTRC made a set of recommendations, after conducting two expert studies and a public hearing on the merger.

The BTRC has recommended that the joint company be allowed to merge spectrums for its services, but Airtel must not sell out stakes from the company until expiry of its 2G spectrum licence in 2020.

The BTRC proposed to put the bar on Airtel to allow for fair competition, as all mobile operators received the 2G spectrum (in 900 and 1,800 bands) at different prices at different times.

On the spectrum issue, there have been speculations on which way the regulator will lean, ever since Robi and Airtel applied for merger approval to the BTRC in September.

Upon the completion of the merger, Robi's parent company Axiata will hold a 68.3 percent controlling stake in the combined entity, while Bharti Airtel will hold 25 percent; the rest 6.7 percent will belong to NTT DOCOMO of Japan. The other recommendations provide for workers' job security and better market competition.