The cancellation of the licence of Bangladesh’s first mobile operator Citycell in 2016 under the ousted Awami League government is an example of politically “selective enforcement,” according to a white paper on the telecom sector.
Prepared by a seven-member committee led by BUET Professor Kamrul Hasan, the white paper says that the Bangladesh Telecommunication Regulatory Commission (BTRC)’s decision to shut down Citycell was politically motivated and disproportionate.
The white paper has been submitted to Chief Adviser Muhammad Yunus. TIMES of Bangladesh has seen the unpublished document.
The paper highlights significant flaws in Bangladesh’s telecom regulatory framework, revealing how selective enforcement undermines the credibility of both the regulator and the market.
“The regulator’s perceived selectivity in enforcing financial compliance against Citycell – while ignoring similar or larger arrears elsewhere – created a precedent that blurred the boundary between regulation, enforcement, and political expediency,” the white paper said.
Citycell, officially known as Pacific Bangladesh Telecom Limited (PBTL), had been a pioneer in Bangladesh’s mobile industry, launching services in 1993. However, in 2016, BTRC cancelled its spectrum due to Tk477.69 crore in unpaid dues.
Despite a High Court order for Citycell to pay two-thirds of the amount, the operator paid Tk244 crore. BTRC deemed this insufficient and shut down Citycell’s network, a decision that the white paper describes as “arbitrary, discriminatory, and politically motivated.”
The ownership structure of Citycell, which included Pacific Motors – owned by BNP leader M Morshed Khan – with a 37.95% stake and Singapore Telecom’s subsidiary SingTel Asia Pacific Investments with a 44.54% stake, added a political dimension to the case.
The white paper noted that the regulatory action appeared to be influenced by political considerations rather than purely financial issues.
It highlights that “this selective enforcement erodes investor confidence, particularly among foreign investors,” further stating that SingTel’s involvement in Citycell reflected foreign faith in Bangladesh’s telecom growth potential, which was undermined by the abrupt cancellation of the operator’s license.
Citycell’s exit reduced market competition at a time when the telecom industry was already dominated by a few operators. This not only limited consumer choice but also hindered innovation and pricing discipline.
“In an environment where significant market power (SMP) was already an emerging concern, the loss of a licensed operator accentuated monopolistic tendencies and weakened sectoral diversity,” the white paper said.
The case also revealed BTRC’s vulnerability to political influence, especially in cases involving politically affiliated shareholders. The lack of transparent dispute resolution mechanisms and the binary approach – “either full compliance or immediate shutdown” – highlighted “systemic deficiencies” in its licensing dispute resolution framework, financial recovery procedures, and regulatory foresight.
“This episode exemplifies the intersection of regulatory rigidity, political interference, and institutional weaknesses that has historically constrained the credibility and maturity of Bangladesh’s telecom sector,” the white paper concludes.
In September 2024, PBTL formally applied to BTRC for the reinstatement of Citycell’s operating license, asserting that the 2016 closure was based on “an unjustified perception” of political affiliation and abuse of power.
BTRC acknowledged receiving the reinstatement request but has not yet made a decision. The case now presents both a challenge and an opportunity for BTRC to restore regulatory credibility.
“If handled transparently and lawfully, Citycell’s reinstatement could help rebuild regulatory credibility, demonstrate fairness, and signal to global investors that Bangladesh’s telecom regulatory regime is capable of objective decision-making, independent of political influence,” the white paper suggests.
