WorldTel Bangladesh Limited

distressed

In July 2001, the Government of Bangladesh (GoB) awarded a license to WorldTel Bangladesh Limited (WBL) that allowed WBL to build, own and operate a fixed line telephone network in Dhaka with a total capacity of 300,000 phone lines. This new license was expected to complement the services offered by state owned Bangladesh Telegraph and Telephone (BT&T), introduce competition and improve service quality. Bangladesh had one of the lowest fixed-line telephone penetration rates in Asia with 624,000 fixed lines (in 2001) for a total population of 130 million. In return for the fixed line license, WBL gave GoB US$ 10 million as license acquisition fee, 2.5% of gross revenue and 10% equity. WBL was a subsidiary of UK based WorldTel Limited. WorldTel Limited in turn was owned by major corporations such as; Reliance Capital, IT Investments, International Investor Group, the Kuwait Financial Centre and National Westminster Bank Plc. The total cost of providing 300,000 connections was estimated at US$ 300 million. WBL was expected to roll out the network in two phases. Phase I with 100,000 connections was estimated to cost US$ 150 million. The project was significantly delayed after WBL became embroiled in a lengthy legal battle with the telecom regulator, Bangladesh Telecommunication Regulatory Commission (BTRC). BTRC officially opened the fixed line service to private sector only in 2004 and hence disputed the validity of the WBL license awarded by the former government in 2001. The dispute seemed to have been resolved in 2005. Construction began in 2005 and Phase I was expected to be operational by November 2006. Operator's license suspended after Illegal VoIP activity. The company was dissolved in 2011.