Bangladesh's leading cellphone companies in legal tussle

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Bangladesh's two leading cellphone companies are negotiating with a regulator over claims of about $1.5 billion in unpaid taxes as they face a possible loss of their licenses amid a legal battle that could hurt investor confidence.

The Bangladesh Telecommunication Regulatory Commission has asked Grameenphone, a subsidiary of Norwegian telecom giant Telenor, and Robi, an entity majority-owned by Malaysia's Axiata Group Berhad, to pay $1.52 billion for evading spectrum fees, value-added taxes and revenue since December 2014.

The two companies say the audits by the commission are flawed.

On Wednesday, Grameenphone officials met with Finance Minister A.H.M. Mustafa Kamal, Telecommunication Minister Mustafa Jabbar and other government officials to try to resolve the dispute.

Kamal said they discussed the issue in detail and hope to settle the crisis within three weeks.

Michael Foley, chief executive officer of Grameenphone, said in a statement that they are looking for an "amicable solution."

"We look forward to a positive conclusion on this issue, which will allow the industry and the government to refocus on building digital Bangladesh," he said.

Shahed Alam, chief corporate and regulatory officer of Robi, said it also welcomed the government's decision to meet for "a candid and transparent discussion on resolving the disputed audit claims."

"We believe the much-protracted impasse in the telecom sector will finally come to an end, much to the delight of the industry stakeholders," he said in a statement.

The crisis deepened in recent weeks after the regulator on Sept. 5 issued notices to the operators asking them to explain within 30 days why their licenses should not be canceled for failing to pay the taxes.

Earlier this year, the regulator slashed Grameenphone's bandwidth by 30% and Robi's by 15%, putting pressure on them, but the decision was later reversed because of the inconvenience to their millions of subscribers.

But they continued to suffer as the regulator stopped allowing them to import network equipment or offer new services and packages to subscribers.

The two operators together have more than 120 million active subscribers, about 76% of the total active subscribers in the country.

Robi Axiata Limited (Robi) is a subsidiary of the Asian telecom giant Axiata Group Berhad, based in Malaysia. Other shareholders are Bharti Airtel International (Singapore) Pte. Ltd. and NTT DOCOMO Inc.

Grameenphone is a joint venture between Telenor, the largest telecommunications service provider in Norway with mobile phone operations in 12 other countries, and Grameen Telecom, a non-profit organization in Bangladesh. The remaining shares belong to general retail and institutional investors.
 
Source: https://www.baltimoresun.com

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