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Bashundhara seeks to invest in Teletalk

Struggling state-run mobile operator Teletalk is evaluating a proposal from Bashundhara Group to become its strategic investor, in a move that can shake up the country's mobile landscape.

The proposal, which was submitted to the Post and Telecommunications Division from Bashundhara Telecommunication Limited, outlines a plan to develop the network, enhance customer service and upgrade the systems of Teletalk, which has made losses in all but the first two years of its 19-year-existence.

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On Telecom Minister Mustafa Jabbar's instruction, Teletalk, whose net loss widened 27.2 percent Tk 223.1 crore in fiscal 2021-22, formed a committee to assess the proposal.

"We are scrutinising the proposal -- some of our officials are looking into it," Nurul Mabud Chowdhury, the operator's managing director (current charge), told The Daily Star.

Chowdhury declined to share details of the proposal and how much Bashundhara intends to invest as the matter is still in the early stages.

Bashundhara Group's bid to step into Bangladesh's mobile landscape comes when local conglomerates have steered clear due to the capital-intensive nature of the business. Both Robi and Banglalink started with local owners, who sold off their businesses to foreign owners with bigger financial muscle in 2004 and 2007 respectively.

For Bashundhara Group, this is its second bid to become a strategic investor in an institution. In September last year, ABG Limited, a concern of Bashundhara Group, became the strategic partner of the Chittagong Stock Exchange by picking up 25 percent stakes for Tk 240 crore.

"We are neither granting consent nor expressing dissent to the proposal at this time -- it is now subject to review," said Telecom Secretary Abu Hena Morshed Zaman, who is the chairman of the Teletalk board.

The committee will evaluate whether the proposal would be beneficial for the government and Teletalk, he added.

Contacted, Telecom Minister Mustafa Jabbar said: "[Bashundhara Group] has sent a letter expressing their interest to invest in Teletalk, but the letter is not a detailed one. Anyone can have interest, but we have to know what exactly they want." 

Since its inception in 2004, Teletalk, whose market share stood at 3.4 percent as of August, has received several investment proposals, mainly from abroad, but the government did not give the green light to any of those pitches.

For instance, in April 2008, UAE-based telecom operator Etisalat expressed interest in buying a stake in Bangladesh's state-run mobile operator.

In 2019, Vietnam's Viettel also wanted to invest $250 million in Teletalk. However, nothing happened after that.

A year later, Korean company LG U+ offered a $1.2 billion loan at 3 percent interest for 25 years and without the need for any sovereign guarantee.

The government in recent years is pumping huge amounts of money into Teletalk undertaking different projects to expand its network to rural and remote areas.

A Tk 2,204 crore project started last year to take the operator's 4G network to village levels with about 2,500 towers.

A Tk 519 core project has been running since March last year to expand Teletak's haor coverage. The project's money comes from a social obligation fund, whose contributions mostly come from the private mobile network operators Grameenphone, Robi and Banglalink. The operators have been contributing 1 percent of their gross revenue to the fund.

Additionally, it has recently implemented a Tk 520 crore project to expand Teletalk's mobile broadband network services in the coastal hills and other remote areas.

And yet, Teletalk continues to lose subscribers, while private operators continue to add to their numbers. As of August, which is the latest published data by the Bangladesh Telecommunication Regulatory Commission, Teletalk's subscriber count stood at 64.5 lakh, down by 2.7 lakh from a year earlier.

As of August, there are about 18.9 crore active mobile connections.

"Any investor can express interest to invest in any company, but Teletalk is not like any other company -- it is a state-owned company whose funding comes from the finance ministry," said Abu Saeed Khan, a top telecom expert.

Therefore, before making any decision regarding investment in Teletalk, the parliamentary standing committees for finance and telecom ministries should be consulted.

"Unanimous decisions of the two parliamentary standing committees as well as BIDA should set the guiding principles of such a unique investment proposal in the history of Bangladesh," he added.

Bashundhara Group did not respond to The Daily Star's request for comment.