JUST ONE MORE Major Telecom Player, Japan’s DoCoMo, Exits Bangladesh

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Japan's largest mobile phone operator, NTT DoCoMo is planning to sell its entire 6.3% stake in Robi Axiata, the next largest mobile phone carrier in Bangladesh, to Bharti Airtel Ltd. of India.

The Bangladesh Telecommunication Regulatory Commission, or BTRC, has approved the sale and recommended the telecom ministry pass it.

At closing, Bharti will hold 31% of Robi, while Axiata Group Berhad of Malaysia will retain a controlling stake of 69%.

Robi had 49.6 million active users in Bangladesh by February, behind only market leader Grameenphone, which had more than 74 million users.

"We assume that global telecom giant Bharti Airtel's decision to improve its shareholding in Robi is reflective of its confidence later on of the business as a leader in the digital era and also the long-term prospect of the Bangladesh economy," said Shahed Alam, chief corporate and regulatory officer of Robi.

But DoCoMo becomes the latest of some foreign telecom players who've made a decision to depart Bangladesh - including Orascom Telecom Holding (now Global Telecom Holding of Netherlands), Singapore Telecommunications Ltd. and Dhabi Group (Warid Telecom) of Abu Dhabi.

DoCoMo in the beginning bought a 30% stake in Robi (formerly called Aktel) 12 years back for $350 million.

DoCoMo's tenure in Bangladesh has been frustrating because of the Dhaka government’s regulatory policies on fiber optical cable, interconnections and telecommunication transmission.

Most mobile operators can lay fiber optic in other countries, but in Bangladesh, they need to have others perform that service. DoCoMo also reeled from the Bangladesh's mobile industry very high 54% tax rate.

"When NTT DoCoMo [reduced] its shareholding [in Robi] from 30% to 8% in 2013, the Bangladesh government should have taken it as a wake-up call," said Abu Saeed Khan, a senior policy fellow at LIRNEasia, an information and communication technology policy and regulation think-tank located in Colombo, Sri Lanka. "Now [DoCoMo] is finally leaving Bangladesh at such a time when the world is nervously looking forward to a severe economical downturn."

For DoCoMo, this investment in Robi didn't produce any noteworthy returns. In the last year, DoCoMo had nobody sitting on the board of Robi and even withdrew all of its managers at Robi greater than a year ago.

Khan, also a former secretary general of the Association of Mobile Telecom Operators of Bangladesh, now warned that DoCoMo’s exit might make other global players hesitate to enter Bangladesh.

The departure of japan telecom giant could also delay Bangladesh’s path towards 5G services.

However, Jahurul Haque, the Commissioner of the BTRC, disagrees with that notion.

"Bangladesh is an enormous market and all the top global players are running [businesses] here. You will never find so many customers in [such a] small [place] like Bangladesh," Haque said.

In February, Robi put on the Bangladesh Securities and Exchange Commission in order to get listed on the currency markets.

Robi said it had been wanting to raise about $62 million in the capital markets. The proceeds raised will be used for network expansion. (Grameenphone started trading in November 2009.)

However, Robi’s corporate parent Axiata wants the Bangladeshi authorities to lower its corporate tax rate by at least 10% from the current 45% rate.

"We will seek to lower the corporate tax to 30% to 35%, or else there will never be any benefit for the listed company," said Alam of Robi. (Grameenphone initially received the organization tax benefit when it first got listed, but the Dhaka government revoked that benefit a few years ago).

Axiata also wants a removal of the government’s 2% minimum tax on overall revenue.

Robi officials were likely to meet with Bangladesh finance minister to go over these demands.
Source: https://www.ibtimes.com

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