Citycell, a pioneer in telecom service industry, is negotiating for sale of the company to induce massive investment which will help it turn around and introduce state of the art mobile technology.
For the third time the company has opened up to invite investors, after mass migration of subscribers to other operators, it has failed to raise reasonable funds to pay huge debts to state telecom regulatory body for years.
Bangladesh Telecom Regularity Commission (BTRC) has repeatedly extended deadline for Citycell to pay unpaid fees of Tk 229 crore and has listed the company as defaulter.
On December 2 last year, BTRC threatened to cancel Citycell's operating licence unless it pays its dues worth Tk 249.71 crore. After disbursing Tk 26 crore against dues, BTRC revoked the cancellation order.
Citycell officials argued with BTRC that despite demand for 10 megahertz spectrum, the mobile phone company receives 6.5 MHZ, which is detrimental to expansion of business to earn revenue.
Earlier, Citycell brand name of Pacific Bangladesh Telecom Ltd acquired its assets and market from Hutchison Telecommunications Hong Kong Holdings Ltd in 1989. Later Citycell sold its share to Sing Tel Asia Pacific Investment Pvt (44.53 per cent), Far East Telecom Ltd (17.52 per cent), and Pacific Motors Ltd (37.95 per cent).
The Citycell company's primary owner Morshed Khan, former Foreign Minister and senior leader of Bangladesh Nationalist Party (BNP), is living in self-exile after military-backed caretaker government took power in 2007, popularly known as 1/11 regime.
Poor investment on infrastructure development, lack of expansion plan and failed bid for 3G, the lone CDMA mobile operator in the country began to lose customer base rapidly. The customer aspirant for 3G services quickly migrated to other GSM mobile phone companies.
However, Citycell major share of business revenue was accrued from Zoom Ultra internet service through telephony system.
Thus, the directors and shareholders decided to negotiate for sale of the company including the liabilities. The largest chunk of debt was with BTRC worth Tk 229 crore and the due is increasing, BTRC officials said.
The Citycell senior officials held several crucial parleys with a Vietnamese telecom MobiPhone.
MobiPhone, a successful company since 1993, is ready to accept the challenge in the stiff competitive telecom consumer market in Bangladesh. In Vietnam, MobiPhone ranks second to the state telecom company.
The Vietnamese telecom would have to face an uphill task to catch-up with other rival giants GrameenPhone, Robi, BanglaLink, and Airtel.
The executives of MobiPhone have met Telecommunications Minister Abdul Latif Siddiqui and BTRC Chairman Sunil Kanti Bose, officials said.
MobiPhone has also taken into stock the infrastructure and telecom facilities of Citycell and are hopeful to strike a deal, they said.
In fact Sing Tel has lost interest to pump money in the Bangladesh telecom industry and instead decided to surrender their entire share of 44.53 per cent. MobiPhone are enthusiastic to buy Sing Tel's share.
"It would be an honourable exit for Sing Tel, a major partner of Citycell brand who are groaning under collapse of business," said a BTRC official.
However, officials with Citycell declined to discuss the negotiation for sale of the company, but admitted that it is increasingly becoming difficult to pay salaries, benefits and festival bonus. Most importantly, budget constraints have severely limited maintenance and upgrading telecommunication equipment and services.
Mehboob Chowdhury, Chief Executive Officer (CEO) of Citycell, told The Daily Observer that the Vietnamese mobile phone company is keen to invest in Bangladesh. The company has expressed their eagerness after meeting with senior government officials.
He said the company has not spelled out any investment plan for Citycell. However, Citycell would consider the investment plan.