“We are not happy.” That was how the Chairman of the Bangladesh telecoms regulator summed up the outcome of the spectrum auction which concluded in Bangladesh on 13 February 2018. High reserve prices resulted in low demand – even the state-owned operator Tele Talk didn’t bother to show up – and even lower auction receipts. 66% of the spectrum on offer remained unsold. It is a sorry outcome in a country where the mobile service is pitiful.
Yet it could have been very different. Coleago carried out a detailed valuation of the spectrum based on the operators’ business case. Had the reserve price beeen set 60% lower, it is highly likely that all the spectrum would have been sold. This would have resulted in the regulator generating up-front licence fees 14% higher and in the longer term the annual spectrum fee income would have been three times higher.
In analysing the reasons for the spectrum auction failure, Stefan Zehle sets out a warning to Thailand where reserve prices for the forthcoming 1800MHz spectrum auction have also been set unrealistically high. Could we see another failed auction result and missed opportunity around the corner?
Download the full paper here: Spectrum Auction Failure in Bangladesh
Leave a Reply