Tuesday, October 18, 2011

Telenor refuses to pay $400M in fines to Bangladesh authority

SALEEM SAMAD

NORWEGIAN TELECOM giant Telenor has refused to pay the Bangladesh telecommunications authority $400 million in penalties for tax evasion and revenue sharing costs.

Telenor chief executive officer Jon Fredrik Baksaas dashed to Dhaka to meet Bangladesh Prime Minister Sheikh Hasina over the weekend to apprise her of the standoff between Telenor’s venture partner GrameenPhone (GP) and the Bangladesh Telecommunication Regulatory Commission (BTRC).

GrameenPhone’s chairman, Sigve Brekke, in a press briefing Sunday, threatened to take the regulatory authority to court to achieve a settlement of the purported audit findings.

Brekke, also head of Telenor’s Asia operations, said he wants the audit done in a proper way, a position the country's leading mobile phone operator has maintained since Oct. 3, when BTRC sent a letter to GP claiming the operator owes $400 million (BDT 30.34 billion) in revenue sharing and taxes.

Executives of the Norwegian phone company initially responded that the audit findings did not follow international standards, but maintain there is still room for settling the dispute through dialogue.

GP was asked to pay the dues by Oct. 23 otherwise the regulator might take legal action. BTRC chairman Zia Ahmed has described GP’s attitude as arrogant.

Meanwhile on Sunday, Hasanul Haque Inu, chairman of the parliamentary oversight committee on telecommunication, questioned whether the methodology by which the assessment of GrameenPhone was conducted had been defined.

Telenor, with a 55.8 percent share of GrameenPhone, dominates the telecom industry in Bangladesh. The company boasts of 32 million mobile phone subscribers, nearly 43 percent of the country's total mobile phone users. It has an income of $1 billion annually.

Saleem Samad, an Ashoka Fellow is an award winning investigative journalist based in Bangladesh. He specializes in Jihad, forced migration, good governance and elective democracy. He has recently returned from exile after living in Canada for six years. He could be reached at saleemsamad@hotmail.com