Defying guidelines, NTTN operators yet to go public

Five of the six operators of Nationwide Telecommunication Transmission Network (NTTN) have not gone public despite being mandated to float shares on the stock market several years ago.

According to the NTTN licensing guidelines, which is primarily on laying underground optical fibres, an operator must file for an initial public offering (IPO) within five years of obtaining the licence.

Bangladesh currently has six NTTN licensees, including three state-run agencies and three private companies.

However, only the Power Grid Company of Bangladesh Ltd (PGCB) is listed on the Dhaka Stock Exchange.

None of the others, which were all awarded the licence between 10 years to 15 years ago, have floated shares to the public.

The companies are Fibre@Home Ltd, Summit Communications Ltd, Bahon Limited, Bangladesh Railway, and Bangladesh Telecommunication Company Ltd (BTCL).

Fibre@Home secured the licence in January 2009 while Summit Communications, a concern of power sector heavyweight Summit Group, received theirs in December of the same year.

Bangladesh Railway, PGCB and BTCL received the licence in 2014, according to Bangladesh Telecommunication Regulatory Commission (BTRC).

Bahon Limited received its licence in December 2019.

Moynul Haque Siddiqui, chairman of Fibre@Home Ltd, said his company planned to go public long ago.

However, the previous government's decision to change the IPO valuation method discouraged companies with good fundamentals from going public, he said.

"This is the reason behind the delay. Good companies are unwilling to come to the stock market with the current valuation method for share prices," he said, adding that they had already informed Bangladesh Investment Development Authority about the issue.

In a letter sent in May, the BTRC asked Fibre@Home to take steps to float shares.

"We expect to issue an IPO by December. We expect that policy regarding the valuation will change by this time," Siddiqui said.

Summit Communications, in an emailed response, said it had initially planned to file for an IPO, but outlined reasons it could not.

"Due to local market challenges, unforeseen global challenges, including the Covid-19 pandemic, which severely impacted both local and international financial markets, we were unable to proceed as intended," it said.

The largest infrastructure company in the telecom and internet sector in Bangladesh said it had "diligently worked towards securing the necessary no objection certificate from BTRC, but the timing was not conducive to moving forward with the listing process at that time".

Summit Communications said it remains fully committed to pursuing an IPO as soon as market conditions stabilise and become more favourable.

However, it did not provide any timeline.

"We continue to monitor the broader economic environment and aim to proceed when we are confident that the market is positioned for forward-looking stability," it said.

"Once these conditions align, we are prepared to move forward with the listing at the earliest opportunity, in line with our long-term vision for sustainable growth and maximising value creation," the company said.

BTRC Chairman Md Emdad Ul Bari said the commission had asked licensees who are obligated to go public to do so.

"We have also decided to ask them to explain the reasons behind their failures and their plans for going public," Bari, a former major general, said.

Mohammad Rezaul Karim, spokesperson of the Bangladesh Securities and Exchange Commission, said the primary regulator should enforce the rules.

"If companies do not comply, the BTRC should enforce the rule. If there is any bottleneck, we can work to address those," he said.

Karim added that a task force was working to suggest reforms for the capital market, which may include revisiting the valuation method of IPOs.

"If the panel recommends anything regarding the valuation method of IPOs, the commission will consider it," he said.

In a WhatsApp reply, the BTCL said the state company is providing comprehensive telecom services under 10 licences issued by the BTRC.

"The BTCL maintains one account against revenue from the services it offers under these licences," it said.

"So, there is no scope to separate NTTN's (revenue) from the accounts. Yet, the BTCL is committed to comply with the guidelines by the BTRC," it said, but did not mention any time regarding going public.