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    2. 2

    3. 3 EXPERIENCE OF BR Bangladesh Railway leased out 1500 km of one pair OFC to Grameen for 20 years with exclusive right, through international tender in 1995. The bidding was on a combined set of weighted points of technical parameters and rental to be paid.

    4. 4 An Indicative Lay-out of PGCBs OPGW Network

    5. 5

    6. 6

    7. 7

    8. 8 Indicative Layout of PGCB System with Lessees System

    9. 9 PGCBs Countrywide OPGW Network

    10. 10 Lease Asset One Pair of Dhaka-Chittagong OPGW Length: 246 Km Starting From Rampura to Hathazari as is where is basis

    11. 11 Business Chain around the Lessee

    12. 12 Major Parameters

    13. 13 Capacity Capacity STM 64 (10 Gbps) Minimum Initial Capacity STM 16 (2.5 Gbps)

    14. 14 Lease Term Lease Term 15 years Subject to validity of L1 and L2 upto the earlier of the validity of L1 and L2 Beyond that, there is scope for renewal to cover at least upto 15 years, if L1 and L2 can be renewed L1- License of PGCB and L2 License of Lessee There was scope of renewal beyond 15 years

    15. 15 Leasing Process

    16. 16 Leasing Process

    17. 17 Expression of Interest Expression of Interest was invited Notice published in newspapers EOI document was made available EOI closed 16 February 2005

    18. 18 Objectives of EOI Objectives of EOI were to Apprise potential Investors of the OPGW Network Develop a technical and commercial framework Transparent leasing process Benefit to all types of telecom operators and users Collection of information, ideas and suggestions for preparing a comprehensive Tender Document and Lease Agreement with feedback from the Investors

    19. 19 Publication of Notice Notice inviting tenders published in six national dailies First published in the Daily Observer on 31 October 2005 Tender submission dead-line was 29 December 2005 Deadline extended to 30 January 2006 (On request of the tenderers at pre-tender meeting) Extension notice also published in six national dailies

    20. 20 Tender Nitty-gritties Tender Security : Tk 50 lakhs Validity: 30 Days beyond the tender validity Period (180 days)

    21. 21 Tender Submission 6 Investors purchased tender document Concord Pragatee Consortium Limited National Telecom Limited Grameen Phone Limited TM International (Bangladesh) Limited Warid Telecom Bangladesh Limited Sheba Telecom Limited 4 Tenderers submitted tenders on due date Concord Pragatee Consortium Limited National Telecom Limited Grameen Phone Limited TM International (Bangladesh) Limited

    22. 22 Tender Evaluation Tender evaluation done in two parts Part I: Qualification and Technical Responsiveness Test Part II: Financial Ranking Based on GAR quoted Basis of awarding the lease passed the Part I evaluation Quotes Highest GAR in Part II

    23. 23 Part I Evaluation Qualification and Technical Responsiveness Test

    24. 24 Part II Evaluation: Financial Ranking Guaranteed Annual Rental

    25. 25

    26. 26 Financial Ranking

    27. 27 Critical Terms and Conditions

    28. 28 Delineation of Risks and Responsibilities O&M Obligations of the Parties PGCBs O&M Obligations PGCB to take O&M responsibility of the overhead OPGW and CUEs PGCB should provide space of CUEs Lessees O&M Obligations Lessee is required to use its best effort to maintain the segments of the network which is under its exclusive control PGCB will not take consequential losses to sub-lessee

    29. 29 Minimum Initial Capacity Minimum Initial Capacity Minimum Initial Capacity of MUX needs to be prescribed so that sufficient bandwidth capacity is available for sublease to prevent that the lessee restricts others to sublease the bandwidth due to capacity limitation Monitoring of the Capacity of the Lessee Specifying minimum initial capacity Installing two sets of equipments One at TNSP Premises and one at PGCB Premises

    30. 30 Competition Requirements: OUR The lessee requires to maintain an Outside Use Ratio (OUR) To keep x% of the capacity reserved to sublease irrespective of need for own use or demand for bandwidth To provide the bandwidth reserved for outside use in a non-discriminatory manner on request at rates and charges Approved by BTRC

    31. 31 Payments to PGCB Guaranteed Annual Rental (GAR) (Taka per Year) to be paid quarterly by split of GAR in four installments certain amount of rental to PGCB without being affected by the Lessees business fluctuations. Variable Lease Rental (Taka per Year) To be paid quarterly (can also be divided in smaller time slots) A % of Lessees Revenue or unit rate multiplied by number of units of business Units of business to be defined Lessees Revenue from Sublease of the bandwidths Lessees Revenue from Own Use by billing own customers

    32. 32 Payments to PGCB Upfront Payment at the time of signing lease agreement For commitment of Lessee A 10% of Present Value of GARs

    33. 33 Availability Availability guarantee: 98% time of the year Beyond allowable interruption (2% time): lessee can claim GAR and VLR for the period of non-availability Claim Non-deductible from rentals

    34. 34 VLR Variable Lease Rental (VLR) 25% of E1-km*rate. Varies with lessees business. To be paid quarterly

    35. 35 Sub-lease of OUR Capacity Reserve for sub-lease 30% of total capacity If no sub-lease request, lessee requires PGCBs permission May use more than 30% Single Sub-Lessee not more than 10% of the capacity

    36. 36 Time Limits for Implementation

    37. 37 Lessees Obligations and Rights Performance Guarantee (max. of first five years GAR) for five years or more to be paid on signing the agreement, To maintain implementation work schedule To train PGCB personnel To comply with L2

    38. 38 Lessors Obligations and Rights Space and Power for CUE Access to Lessees premises No-Withdrawal of facilities provided

    39. 39 Operation and Maintenance Lessors O&M To maintain availability Lessor will operate and maintain an OMC Service interruption (within 2%) due to maintenance also counted as non-availability Lessor arrange spare OFC capacity for avoiding long interruption

    40. 40 O&M Contd. Lessees O&M To identify and inform faults in the lessors system through Network Management Center (NMC) Maintain facilities to protect environment, public safety and lessors system Maintain professional personnel for the lease asset

    41. 41 Termination Ways of Termination Willful Termination Termination due to Force Majeure Termination due to Lessees Events of fault Termination due to Lessors Events of fault Termination due to cancellation of L1 and L2 Termination upon expiry of lease term

    42. 42 Transfer of Equity Partial Transfer May transfer among themselves within first five years with following conditions: Lead member maintains 51% share Others to maintain 25% of their original shareholdings Full transfer May transfer 100% after five years

    43. 43 Review of Agreement Scope to review after 5 years

    44. 44 Comparison between BR and PGCB cases

    45. 45

    46. 46

    47. 47

    48. 48 Conclusion a good learning experience for all of us to understand the telecom business Among the four operators: GP expected to be a good pay master CPC has no Telecom business experience NTC is a PSTN operator AKTEL is mobile operator, but quoted the lowest