Curtain to come down on Citycell by Aug 23

The government has set in motion the process to revoke Citycell's licence after the operator failed to pay its dues amounting to Tk 477.51 crore.

Citycell's subscribers have until August 23 to switch to another operator, State Minister for Telecom Tarana Halim said yesterday, after a meeting with the telecom regulator. Citycell has about two lakh subscribers at present, compared to 7.02 lakh at the end of June.

“We have taken the final decision of shutting down Citycell following all procedures as we have not received any response from the operator since long,” said Telecom Secretary Faizur Rahman Chowdhury.

Bangladesh Telecommunication Regulatory Commission will now forward its recommendation to the Prime Minister's Office to terminate the licence of the country's oldest operator. Prime Minister Sheikh Hasina is the telecom minister.

Contacted, Taslim Ahmed, head of corporate communications at Pacific Bangladesh Telecom that owns Citycell, said the operator learnt about the latest development from the media.

“After BTRC's notice we have started our process to discuss the issue with the government. We are very hopeful of getting a positive result,” he added.

Earlier on July 31, BTRC issued a public notice and asked Citycell's subscribers to switch to other operators by August 16.

The operator's subscription reached a peak of 19 lakh in 2011, but it has been a minor player in the market for at least 10 years now.

In fiscal 2014-15, its total revenue stood at Tk 139.77 crore, while its investment was zero, according to the BTRC's annual report.

Over the last two weeks, the majority of Citycell's active customers jumped ship, with the operator's daily revenue now being only a few thousand taka, said a senior executive of Citycell. “Even our own executives and employees got new connections,” he added. Citycell did not pay the second and third instalments -- amounting to Tk 229 crore -- of its spectrum renewal fee. The renewal took place in 2012.

Besides, it owes annual spectrum fees totalling Tk 27.14 crore from 2013 through to 2016; revenue sharing proceeds of Tk 27.84 crore from 2014 to 2016; social obligatory fund contributions of Tk 8.92 crore from 2011 to 2016; value-added taxes of Tk 39.92 crore; and Tk 135 crore in penalty.

Earlier in April, BTRC filed a case against the operator under the Public Demand Recovery Act to realise the dues. If needed, the telecommunication watchdog will enter into other legal fights with the operator, Tarana said.

About the recovery of the dues, Chowdhury said they would move for legal action after the final decision of the government.

Citycell began its operations in 1993, though its licence was awarded in 1989.

Singapore's SingTel owns 44.54 percent shares in Citycell, Pacific Motors 37.95 percent and Far East Telecom 17.51 percent.

Shareholders have been trying to sell the company for the last few years, but they did not find any interested party.

About the possible impact on the sector of Citycell shuttering, Tarana said: “We want to set a precedent that no-one is above the law. Every operator has to run its business as per the law.”

Tarana, however, was reluctant to make any comment about the fate of Citycell's employees, saying it was the operator's internal matter.

Telecom experts said the government is being very tough on Citycell for the unpaid dues, but it has not taken similar action against Teletalk or Bangladesh Telecommunications Company Ltd. Their combined dues go upwards of Tk 3,000 crore.

In response, Tarana said both Teletalk and BTCL are government-owned companies, so steps will be taken to legalise the dues in favour of the government.

“We can take Teletalk's dues as prepaid capital -- a proposal along this line is now under consideration of the government,” she added.

BTCL's dues stand at Tk 1,645 crore and Teletalk's Tk 1,585 crore, according to BTRC.