Prime Minister Sheikh Hasina yesterday expressed dissatisfaction over the service quality and business performance of state owned mobile carrier Teletalk, asking it to seek a suitable foreign company for probable merger.

A network expansion project proposal for Teletalk was placed before Hasina, who is also the telecom minister, at a meeting of the Executive Committee of the National Economic Council (ECNEC). However, she came down heavily upon the operator's passive attitude on becoming a competitive player.

The prime minister directed the management of Teletalk to find ways of becoming a profitable venture.

“To become a competitive player in the market, the prime minister gave an order to Teletalk to search for an appropriate foreign company for merger,” AHM Mustafa Kamal, planning minister, told journalists after the meeting.

The premier also directed the operator to improve service quality and offer better services to customers, he added.

The meeting held at the NEC conference room at Sher-e-Bangla Nagar with the prime minister in the chair approved a project of Teletalk for network expansion at a cost of Tk 675 crore.

Teletalk will get the money from the government as equity, which the company will return from its earnings, said the planning minister.

Earlier, Telecom State Minister Tarana Halim sought investment for Teletalk from the Malaysian government as well as Indian giant Tata Communications, as a part of efforts to turn the state-run operator into a vibrant company.

Tarana was present at yesterday's meeting. However, she was not available for comment later.

Shyam Sunder Sikder, secretary of the telecom division and chairman of the Teletalk board, said the prime minister has directed them to become a vibrant company.

Teletalk began its journey as the country's fifth operator in March 2005 with a capital of Tk 643 crore as a company under the telecom ministry. It initially had the capacity to serve only 40 lakh users, which has now been raised to one crore. The state operator has never made public its profitability. However, it is a loss making venture despite extra government support, said officials. The company began commercial 3G services more than a year before the other operators, that too without paying any spectrum fee that has a market price of around Tk 2,000 crore.

Teletalk is also acting as a service delivery tool for the government; that is also why it has to expand its network, said Kamal. Currently, it has around 1,700 3G sites. It is also running a project to establish 1,500 3G sites, which will conclude in June next year.

Under the project approved yesterday, the state operator will establish an additional 1,500 3G sites and 1,000 2G sites, mostly targeting growth centres and educational institutions, said a top official of Teletalk.

“After completion of these two projects, Teletalk will become a competitive player,” said the official.

Of the total costs, the government will bear Tk 607 crore and Teletalk will bear the rest Tk 58 crore.

Recently, private telecom operators Robi and Airtel merged operations in efforts to become profitable.