The head of Grameenphone has warned that the government's proposed licencerenewal scheme is so costly that the top mobile phone operator would be forced to put its investment in a high-speed cellular data network on hold for up to five years.

A postponement of a 3G rollout in the country by the telecom market leader, with 29 million subscribers, is all but certain unless its 2011 fees, estimated at Tk 7,000 crore, are reduced, said CEO Oddvar Hesjedal.

Hesjedal called the billion-dollar fees “roughly the whole revenue we generated in 2009.”

“There will be no money left for further investment after defraying our licencerenewal expenses,” the CEO said in a recent interview, so he would ask the government to postpone 3G licensing for five years.

The four major telecom operators, including Grameenphone, now expect to pay a combined Tk 14,000 crore for their licences next year. “With that much money to be paid for renewing our licenses, I absolutely see no chance for 3G or any further investment in this country,” Hesjedal said.

The four operators — Grameenphone, Banglalink, Robi and Citycell — would pay a combined a total of Tk28,000 crore over the next 15 years, but half would be paid in 2011. The telecommunication ministry is now reviewing the BTRC guidelines.

Robi and Banglalink are reportedly each on the hook for about Tk 3,000 crore; Citycell for aboutTk 1,000crore.

“Previously, similarly high fees were imposed for 3G licences in Britain and Germany, which ultimately saw the collapse of several telecom giants, including British Telecom in the UK,” Hesjedal said. "We do not want to see the repetition of such a scene in Bangladesh, do we?"

Domestic banks will not even be able to

disburse this much money to the operators, as they are limited to $250million in loans to a single sector per year, he added. "We may have to go to the international banks for loans — but I doubt, in such case, if we have a strong basis for asking for such a high amount."

"So, the only way for us is to go to the 90,000 shareholders and ask them to pay, instead of giving them dividends," Hesjedal said, asking: "Are they willing to pay?"

The CEO also warned the fee would send a negative signal to foreign investors: “The company that has invested the most and has reached the most people is getting penalised with having to pay the most,” he said.

He blamed a lack of consultation and a lack of a level playing field between various operators: “Firstly, we would have to pay more than others; secondly, two other operators — namely, Warid and Teletalk, whose license is not to be expired in 2011 — will be

exempted from paying these renewal expenses for now.

The subsidiary of Norway-based Telenor's started its business in Bangladesh in 1997, when the cell phone communication system in the country was at its naive stage with only two operators in the market.

"Almost 80 percent of what we invested back in those years was reinvested, and this is why we now have a much better coverage than India," Hesjedal said.