Company Trend Analysis - CityCell To Remain Unattractive Until Debt Resolution - OCT 2017

BMI View: CityCell will not be immediately attractive for investors, for two reasons. First, it is uncertain how much debt the company has accrued . Second, it holds a small range of spectrum that will only be useful when 3G services are more developed and 4G begins to be rolled out .

Bangladeshi operator CityCell is seeking to sell itself to foreign investors. After the Bangladesh Telecommunication Regulatory Commission had decided to cancel CityCell's licence on grounds of non-payment of fees, the Supreme Court reversed that decision so that outstanding fees could be disputed before the courts. The company has been dormant since October 2016, when the regulator was demanding BDT4.77bn (USD59.1mn) in unpaid licence fees. CityCell's stakeholders, including SingTel, have been looking to sell the company but have been unable to find buyers so far. Restoration of the company's spectrum rights should be somewhat helpful in negotiations.

Despite having the spectrum to leverage in negotiations, we expect the company to not have broad appeal for investors in the short term, as they would have to weigh medium-term costs and benefits in a very uncertain context. There are two main reasons why CityCell will not be immediately attractive.

  • Growth Opportunities Remain In 3G Services
    Bangladesh - 3G/4G And Mobile Forecast
    f = BMI forecast. Source: Operators, BMI

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