Bangladesh hangs up on oldest mobile phone operator Citycell

Bangladesh authorities have hung up on the country’s first mobile-phone operator, Citycell, for its failure to pay Tk 4.77 billion in government dues.

State Minister for Posts and Telecommunications Tarana Halim announced the shutdown of operations at a press conference at the office of telecoms regulators BTRC Thursday evening.

“Citycell’s spectrum has been suspended,” she told reporters at the hurriedly called conference.

A team of BTRC officials accompanied by RAB and police was working at the Citycell office in Mohakhali when the media call was under way just after 6pm.

Tarana convened the media after the BTRC team led by its Director (Enforcement) Yakub Ali Bhuiyan entered the Citycell Headquarters Pacific Centre around 4:45pm.  

A few police and RAB officers accompanied him, while others stood guard outside.

Citycell, owned by BNP leader and former foreign minister M Morshed Khan, was the only mobile phone operator in the 90s. Being a monopoly, it raked in huge profits by selling handsets at inflated prices and setting high call rates.

But its business started going downhill with the other operators entering the market later in that decade.

Tarana thinks Citycell will not be able to pay the dues for now as it has failed to meet several deadlines.

“They couldn’t take the opportunity. They owe banks tens of millions of taka. They did not pay the media for advertisement,” she said.

“We want to break with such practices,” she added.

The number of Citycell service users has dropped to 150,000 and they are not going to get any compensation which became clear from BTRC Chairman Shahjahan Mahmood’s remarks.

“The company does not exist, how they will demand and get compensation?” he asked, replying to questions at the press conference.

He said the Citycell users had been given time twice to switch to other operators.

BTRC announced the closure in July, saying Citycell owed the government Tk 4.77 billion. It served a notice on the operator the next month.

Then only CDMA operator in the country got two more months on Aug 29 from the Supreme Court to remain in business, saying it will be able to continue beyond that time if it paid up the dues.

Barrister Reza-e-Rakib, who represented the BTRC, had said after the order that the Appellate Division had disposed of their plea after making some corrections to a previous High Court order and given some directives.

“Two-thirds of the dues will have to be repaid within a month and one-third within the next month."

On top of it, Tk 1.8 million was being added every day to the total amount of dues, he said.

The court ordered Citycell to clear the dues of each new day immediately and said that BTRC could take action if the payments were not made, Rakib said.

>> In 1989, a licence to operate wireless telecom services in the county was issued to Bangladesh Telecom Ltd (BTL).

>> Investments from Hong Kong-based Hutchison Telecommunication Ltd came the next year and the company was then re-christened as Hutchison Bangladesh Telecom Ltd (HBTL).

>> In 1993, HBTL launched mobile phone service in Bangladesh.

>> In December the same year, the company changed hands. The then foreign minister Morshed Khan-owned Pacific Motors and Far East Telecom bought HBTL's shares and it was renamed Pacific Bangladesh Telecom, with the brand name of Citycell.

>> In 2004, Singapore-based SingTel Asia Pacific Investments Pte Limited pumped money into the firm. Morshed Khan made a huge profit by selling a large portion of his Pacific Motors stakes in Citycell to SingTel at that time.

>> According to latest data published on the Citycell website, Pacific Motors has 37.95 percent share of Citycell, SingTel 45 percent and Far East Telecom 17.51 percent.

Tarana told Thursday's press conference that the decision to close Citycell was taken under BTRC’s legal authority following the Appellate Division verdict.

She said Citycell has not paid two-thirds of the dues within four weeks following the court order. “They have cleared only Tk 1.3 billion today. They were supposed to pay Tk 3.18 billion in the first installment.”

Citycell officials had earlier said they were discussing new investments and would continue operations by paying the dues once the money comes.

“They’ve said 11 times that ‘investment is coming’, but they failed. They cannot be trusted anymore. They failed to show anything tangible (about new investment),” Tarana pointed out.

She added that legal actions would be taken later to collect the dues.

Asked whether Citycell will get its spectrum back if it repays, the minister said, “I don’t see any scope for it... They have initially failed to pay.”

On being asked whether Citycell’s spectrum will be cancelled, she said, “It’s a matter of term. The decision to cancel spectrum may be taken.”

BTRC lawyer Rakib said they can cancel licence anytime after suspending spectrum. “It’s just a policy matter.”

Asked whether Citycell could get a verdict in its favour if it moves the court, the minister said, “I think there is no scope for going to court. It cannot be fixed. I think it’s final.”

She also said after suspending Citycell’s spectrum, the government does not have any plan to bring in any other new operator now.

Besides Citycell, Bangladesh has five mobile phone operators – Grameenphone, Banglalink, Robi, Airtel and state-owned Teletalk. Robi and Airtel are in the process of merging their business.

When a reporter asked BTRC chief Mahmood whether they would take any step to ensure that the company compensates its employees, he replied “The employees did not knock BTRC in time. If they came in time, we could have done something.”