For whom Awami League government works for - Indian interest or Bangladeshis?

[idune]

For whom Awami League government works for?

By now everyone aware private university students are protesting imposition of VAT (value added tax) on their tuition fees.
Let’s look at the imposed VAT on tuition fee situation in a broader prospective. Awami government in year 2010-2011 budget imposed VAT (value added tax) on private university tuition. Obvious goal was to increase revenue generation from new source. Immediate question baffling students and citizens of Bangladesh – are private universities really the cash cow for Awami government revenue collection?

But even bigger question arise when we observe same Awami League government given more than 135 crore taka tax (transfer fees) exemptions by allowing Bharati Airtel to purchase $ 650 million dollars (50 million paid for license and 600 million invested) Warid Telecom at virtually no cost ($100k). Docomo bought 30 per cent stake in Robi (formerly Aktel) at a price of $350 million and paid $20 million as tax to the government in 2008. Unlike all other foreign operators who paid tax on purchase, Bharati Airtel was exempted from tax by allowing manipulation and deprived Bangladesh from more than 135 crore taka in tax. Surely VAT on tuition fees will not account for 135 crore taka.

Bottom line here is Indian Telecom gets 135 crore taka tax exemptions from Awami League government but for protesting tax on tuition fees Bangladeshi students brutally beaten by Awami government law enforcements.





Now these students and Bangladeshis should ask whom this Awami League regime works for - welfare of India and Indian companies or Bangladeshi people?

 

[ramu]

You are not clear about Bharti Airtel deal. Stick to the topic of VAT on tuition fee and don't drag India for everything under the sun. Please educate yourself about Bharti Airtel deal.


Bharti’s deal with Bangladesh telecom firm: challenges ahead


Bharti Airtel Ltd has announced a deal to purchase 70% of Warid Telecom International Ltd of Bangladesh. Warid telecom has 2.9 million subscribers, and as per reports, revenues of $80 million (Rs366 crore). Bharti will invest around $1 billion, of which $300 million is capital expenditure (capex), and around $700 million is through purchase of a mix of new and existing shares.

Bangladesh has a population of 160 million and a tele-density of 32%. By this measure, Warid has a subscriber share of 5.6%, and is reported to have a revenue market share of 5%.

Reports suggest that Bharti’s purchase of shares from promoters is for around $0.1 million. Hence, almost all of the $1 billion (including $300 million capex) would be an infusion into Warid. The non-capex infusion would be around $700 million, which may be used to pay off debt. This is plausible as reports suggest that Warid has $900 million debt. Hence, Bharti’s acquisition enterprise value (EV) is $700 million/70% = $1 billion.

This implies, for Warid, an EV/sales ratio of around 12x, which is far higher than Bharti’s own level of around 3x. At 7% rate of interest, $700 million would be equal to $50 million interest cost, and post-tax, about $40 million, implying an impact of about 2.5% on earnings. This excludes the interest cost implied by the $300 million capex that Bharti has to do, as well as any spending on 3G auctions in Bangladesh. If we were to work with a 25% earnings before interest, taxes, depreciation and amortization (Ebitda) margin for Warid, there would be a 1% positive impact on the earnings per share (EPS).

With $80 million revenue and 2.9 million subscribers, Warid has an average revenue per user of about Rs110, which suggests that assuming similar cost structures as in India, Warid should be Ebitda negative, unless it has an extremely efficient and low cost operation, which is unlikely. But considering that Bangladesh’s gross national income (per capita) is $1,440 compared with $2,960 in India, Warid could be Ebitda positive. A 25% Ebitda for Warid would imply a 1% addition to Bharti’s EPS.

To raise earnings by an equal amount, Bharti would have to bring Warid’s profitability to its own level, besides raising revenue.

We would wait for more detailed management commentary before revising earnings. Currently, due to volatile regulatory environment and irrational competition, we maintain a “reduce” rating on Bharti with a target price of Rs. 312.

 

[Kinetic]

AL govt is elected (265 out of 300 seats) by the people of BD but works for India. Thanks to RAW.

 

[LURKER]

For whom Awami League government works for - Indian interest or Bangladeshis?

INDIA ......

got ur answer ...happy now

end of discussion

 

[idune]

Lack of transparency in Warid-Bharti deal alleged

Sheikh Shahariar Zaman

Allegations of lack of transparency have surfaced over the telecom deal between Bharti Airtel and Warid.

Indian mobile telecom giant Bharti Airtel in 2009 bought 70 per cent stake in Warid, the sixth telecom operator in the country, almost at no price.

Chief strategy officer of Robi (formerly AkTel) Koji Ono has openly questioned the deal saying: "Docomo bought 30 per cent stake in Robi (formerly Aktel) at a price of $350 million and paid $20 million as tax to the government in 2008, but we don't know how much tax Bharti paid to the government to get the 70 per cent stake in Warid," he said.

The telecom regulatory authorities should make the whole deal clear so that everybody knows about the exact status of the deal and that Bharti was not given any undue favour for any reason, he said.

The parliamentary standing committee on planning has recently asked the telecom regulatory authorities to spell out the deal as the agreement has deprived the government of about Tk 1.35 billion in tax.

"We have sought an explanation on the deal as there is allegation that the government lost some revenue over the agreement," the committee chairman Oli Ahmed said.

Warid was registered with the Registrar of Joint Stock Company in December 2004 with a paid-up capital of Tk 2.0 million and authorised capital of Tk 100 million.

It changed its name from Warid Telecom BD (Pvt) Limited to Warid Telecom International Limited in 2006.

It raised its paid-up capital by Tk 9.25 billion in January 2007 and again by Tk 10.73 billion in March 2009. It struck a deal with Bharti Airtel and sold a part of its ownership to the Indian company.

[Tax exemption provided by Awami regime]

Warid Telecom transferred over 114.47 million shares to Bharti Telecom at a price of Tk 0.06 per share on February 25 this year against its face value of Tk 100. The Warid telecom showed over Tk 27 billion in losses before the share transfer.

The government, however, withdrew 5.5 per cent telecom share transfer tax just before the handover of Warid share to Airtel.

On February 25, 2010, 207m new shares were created and transferred in the name Bharti.

AT present, Bharti Airtel owns 321.879 million shares and Warid Telecom International LLC owns 137.948 million of the company, whose paid-up capital stood at over Tk45 billion..

Bangladesh Telecom Regulatory Commission (BTRC) chairman Zia Ahmed said, "We have asked Bharti to submit its investment plan. It gave us a plan of $300 million for business expansion," he said.

He admitted that Bharti gave Warid $100,000 as "token money" and then it brought $300 million for investment in the company.

"Now Bharti owns 70 per cent stake in Warid and the $300 million investment has already arrived in the country," the chairman said.

Dhabi Group, promoter of Warid, was looking for a strategic partner as the operator had negative equity and eventually it struck the deal with Bharti, he said.

When asked about the tax loss to the government, he said, "I am against the 5.5 per cent tax imposed on transfer of telecom shares and I am happy that the tax was waived in February this year."

Mr Zia claimed that the commission allowed the Bharti-Warid deal after consulting with the government.

Under the Bangladesh Telecom Act, 2001, BTRC is empowered to take any decision and it does not need to consult with or inform the telecom ministry or any other government agency for taking any decision.

A post and telecommunication ministry official said the government was not aware of the deal as under the existing laws the BTRC does not need to discuss with the ministry for taking decisions.

"We cannot poke our nose into BTRC matters as the ministry's hands are tied," he explained.

He, however, said the cabinet has already approved the amendment to the telecom act to clip powers of BTRC and hand over certain authority to the government.

"The amendment is likely to be placed in the budget session for the approval of parliament," he said.

The amendment will empower the government to become the licencing authority and it will also fix tariff rates and revenue, he added.

When asked why the government has taken the decision to trim the regulatory authorities' power, he said the cabinet is the highest decision making body of the government and it must have a role in tariff and revenue matters of the telecom sector.

"The regulatory authorities will only be the implementing agency after the amendment to the telecom act," he added.

Lack of transparency in Warid-Bharti deal alleged

 

[ramu]

Price valuation and taxation are 2 different subjects so don't mix please.
===========================================

1. Warid Telecom transferred over 114.47 million shares to Bharti Telecom at a price of Tk 0.06 per share on February 25 this year against its face value of Tk 100. The Warid telecom showed over Tk 27 billion in losses before the share transfer.

NO wonder why it sold shares at cheap price.

2. Coming to taxation : Two types of taxation are possible here.
a. Capital gains / profit made by the owners of Warid in the deal. It is clear that Warid telecom made a loss against the investment in Bangladesh. So tax is out of question on any profit.

b. Tax on the shares traded including brokerage is less 1% on each side. This will amount to about 2% of 300 Million and should be about 6 million.

Get the deal made transparent before you write long stories. Instead of crying over a deal that lacks transparency, you have associated the VAT paid. Bharti Airtel has made an investment in a company that was going belly up. Try and understand before you blurt again.

 

[idune]

Price valuation and taxation are 2 different subjects so don't mix please.
===========================================

1. Warid Telecom transferred over 114.47 million shares to Bharti Telecom at a price of Tk 0.06 per share on February 25 this year against its face value of Tk 100. The Warid telecom showed over Tk 27 billion in losses before the share transfer.

License fee alone paid by Warid was $50 million. On top of that they have invested more $600 million mostly capital expenditure in equipments, towers, base stations, Switches etc. So when indians cook the book that 94% loss it just make indians pathlogical liar and deceiver. Equipment and license fees and brand itself worth more than $600 million. Indians are able to do that because Awami stooges are in power.

Rest is more indian BS to cover previous one.

Question remains - these students and Bangladeshis should ask whom this Awami League regime works for - welfare of India and Indian companies or Bangladeshi people?

 

[ramu]

License fee alone paid by Warid was $50 million. On top of that they have invested more $600 million mostly capital expenditure in equipments, towers, base stations, Switches etc. So when indians cook the book that 94% loss it just make indians pathlogical liar and deceiver. Equipment and license fees and brand itself worth more than $600 million. Indians are able to do that because Awami stooges are in power.

Rest is more indian BS to cover previous one.

Question remains - these students and Bangladeshis should ask whom this Awami League regime works for - welfare of India and Indian companies or Bangladeshi people?

grow up.. you are not in a position to comprehend valuation.

 

[M_Saint]

grow up.. you are not in a position to comprehend valuation.

You threw the above one liner right after I called it AWAMY-Malaun-Rapist's bluff in the post # 62 of "It's' Bangladeshi nationalism:Fifth Amendment Ruling" thread because you couldn't stand on it, right? It's trend here for you Indians to hide thread/post from other's eyes by throwing such one liner so they couldn't see you-Indian's nastiness in the home page, no?

 

[scrumpy]

What the hell is a Awamy-Malaun-Rapist? Before you go ahead complaining about an Indian's nasty one liners, don't you think you need to give your own language a good hard look?

 

[Stumper]

You threw the above one liner right after I called it AWAMY-Malaun-Rapist's bluff in the post # 62 of "It's' Bangladeshi nationalism:Fifth Amendment Ruling" thread because you couldn't stand on it, right? It's trend here for you Indians to hide thread/post from other's eyes by throwing such one liner so they couldn't see you-Indian's nastiness in the home page, no?

Well Mate, first, Ramu did make it clear what has been officially stated and what has been on the records. You may contend that the valuation is not transparent. That would be fair to us.

What is not acceptable to us is for the likes of idune to use words like
"makes indians pathlogical liar and deceiver".

If you wish to allege a Indian company as a deceiver, please quote that company. Don't use the abusive language to describe us Indians. We respect you and expect the same from you. In case you have a issue with such deals, take it up with your government and accuse them of wrong doings. Dont accuse us or our government (or our business companies) with-out bringing some *official* proof to the table.

 

[idune]

The police charge batons on Chittagong University (female) student on Sunday at Chittagong's Sholoshohor who were protesting a hike of tuition fees. Photo: Suman Babu/ bdnews24.com/ Chittagong, August 01, 2010

Question remains - these students and Bangladeshis should ask whom this Awami League regime works for - welfare of India and Indian companies or Bangladeshi people?

 

[Stumper]

Question remains - these students and Bangladeshis should ask

whom this Awami League regime works for - welfare of India and Indian companies or Bangladeshi people?

For Students to ASK that ... they first need to know What has tuition fee Hike to do with Indian's and Indian companies?

 

[match]

For Students to ASK that ... they first need to know What has tuition fee Hike to do with Indian's and Indian companies?

Please dnt ask him logical questions .......

cause if any day water not coming in his house so thats because India
just chill

 

[idune]

JS panel asks for details on Warid, Airtel deal
Says govt incurred losses as Warid allowed to sell stake for low price

Staff Correspondent

The parliamentary standing committee on the planning ministry on Sunday asked the Bangladesh Telecommunication Regulatory Commission to submit a report on how 70 per cent of the shares of mobile operator Warid had been sold to India’s Bharti Airtel only for Tk 70 lakh.
The committee chairman, Oli Ahmed, after a meeting, told reporters they had discussed media reports that Warid had been allowed to sell its 70 per cent stake to Airtel only for Tk 70 lakh.
‘The country and the government sustained a loss as Warid was allowed to hand over its share for such a low price,’ he said.
The government lost millions of dollars in transfer fees as the commission allegedly allowed Warid, which invested more than $600 million in the country, to hand over 70 per cent of its stake to Airtel for only Tk 70 lakh in recent times.
The standing committee also suggested that the posts and telecommunications ministry should bring Voice over Internet Protocol under the jurisdiction of law.
It will help to increase revenue earnings of the government as well as provide internet users with better services, the committee observed.
The meeting also recommended making capable the state-run mobile operator Teletalk so that it can survive in the competition with the private mobile operators.
Committee members planning minister AK Khandoker, Nawab Ali Abbas Khan and Azizul Haque Chowdhury attended the meeting.
The meeting discussed in details different projects undertaken by the ministries of land, posts and telecommunications and social welfare.
As for land ministry, it decided that the ministry would inform the committee in three months of the steps it has taken to reclaim illegally occupied government land, how much land has so far been reclaimed and whether any new incident of land occupation has taken places in recent times.
As for social welfare ministry, the meeting decided that proper monitoring should be ensured so that the registered non-governmental organisations properly follow the conditions of registration.

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