Citycell says its licence was cancelled illegally, it wants it back

Pacific Bangladesh Telecom, the first mobile phone operator in the country, seeks to relaunch Citycell. 

The company has recently applied to the Bangladesh Telecommunication Regulatory Commission (BTRC) to reclaim its licence and spectrum.

In 2016, the BTRC shut down Citycell's operations on the grounds of a decline in subscribers and failure to pay outstanding dues. Later, in October 2023, the regulatory body officially cancelled Citycell's licence and spectrum. At the time of its closure, Citycell, the country's only CDMA (Code Division Multiple Access) technology operator, had around 15,000 subscribers.

However, in its recent review application letter, Pacific Bangladesh Telecom stated that BTRC's order to cancel Citycell's licence was illegal.

Pacific Bangladesh Telecom in the application, signed by its head of regulatory and corporate affairs Nishat Ali Khan, argued that Citycell was excluded from various technological upgrades, including spectrum allocation, due to political decisions by the then government.

Despite paying all fees, new claims of outstanding dues were raised unjustifiably, it said. Ultimately, the operation was shut down citing a decrease in subscribers, even though Citycell had an annual turnover of over Tk200 crore before the closure, said the company.

Nishat told TBS that they plan to return to court, deeming BTRC's cancellation of Citycell's licence illegal while the case concerning outstanding dues is still ongoing in court.

"We have applied to the BTRC to get the licence back, and we will also appeal to the court in the future," he said.

In the letter, Pacific Bangladesh Telecom stated that at the time of Citycell's shutdown, the company held 8.82 GB of spectrum and had 850 towers. The closure left 1,000 employees unemployed overnight. 

It also claimed to have fully paid all types of fees, including VAT and taxes. As a result of the shutdown, the company said it incurred debts amounting to Tk4,000 crore. If Citycell had remained operational, it could have generated at least Tk2,000 crore in revenue during the period until now.

The letter mentioned that BTRC's claim of Tk218 crore in outstanding dues, which led to the cancellation of Citycell's licence, was incorrect. The company argued that although the BTRC demanded the amount for 10 GB of spectrum, Citycell was actually allocated 8.5 GB of spectrum. Therefore, the claim lacked justification, it said, adding that the matter of outstanding dues was already being contested in court.

When asked why it did not approach the court at the time against BTRC's decision, Nishat said, "The cancellation of Citycell's licence was a political decision by the government. The court would not have ruled against the government's decision. That's why we did not file a petition in court back then."

When asked whether it would be possible to relaunch Citycell with its significant debt if BTRC reinstated the licence, Nishat responded that despite the shutdown, the company has not defaulted on any bank loans. 

Citycell eyes transition to GSM technology

He further said that if the licence is restored, the owners are prepared to transition Citycell from CDMA to GSM technology to resume operations.

Asked by TBS, Aminul Haque, acting chairman of the BTRC, declined to comment on the receipt of the letter or the matter of returning the licence.

On 9 September 2022, all spectrum allocated to Citycell and the Radio Communication Equipment Licence was cancelled on 7 August of the same year. Subsequently, on 15 September 2023, the BTRC cancelled Citycell's 2G service licence.

According to officials concerned, during the tenure of President Hussain Muhammad Ershad, Citycell was granted a licence in 1989. The service was launched jointly by Hong Kong-based Hutchison and Bangladesh Telecom Limited. They used analogue mobile technology. The mobile service was highly expensive and not accessible to the general public.

When the BNP came to power, in 1993, the domestic industrial group Pacific Motors and Far East Telecom acquired a 55% stake in Citycell. Of the stake, Pacific Motors held 37.95% and Far East Telecom held 17.51%. The remaining 44.54% of the shares were owned by Singtel, a Singapore-based telecommunications provider. The head of Pacific Motors is former foreign minister and BNP leader M Morshed Khan.

Before Grameenphone acquired its licence in November 1996, Citycell was the sole mobile operator in the country.