A new tax on mobile phone connection levied last week has rankled investors who have warned of rethinking their investment in this growing sector in Bangladesh.

The country's four private mobile telephone operators on Monday urged the government to withdraw the newly imposed tax of $19 to allow the continued growth of this burgeoning sector.

"We earnestly appeal to the government to withdraw this new tax and allow the continued growth of this sector," said Erik Aas, CEO of GrameenPhone, country's largest mobile phone operator.

He addressed a joint press conference here with Aktel Managing Director M Nasir Baharom, Banglalink CEO Lars P. Reichelt and CityCell Vice-Chairman Faisal Morshed Khan.

They said the new tax would push up the start-up cost for mobile telephony and thus shy away millions of potential subscribers as well as investment worth millions of dollars.

Lars P. Reichelt, the CEO of Banglalink, feared the mobile operators would have to withhold their planned investments in this potential growth sector in Bangladesh if the government goes ahead implementing the new tax regime on cellphone connection.

The four companies have plans to invest about $1 billion this year for expansion of their network and coverage in Bangladesh, said Morshed Khan.

Since the inception of mobile phone in Bangladesh in 1991, the operators have invested around $1 billion till 2004.

The minister in his budget proposal placed in the national parliament on Thursday proposed a tax cut on handsets from $24 (Taka 1,500) to $4.5 (Tk 300) at the import stage, but he put a levy of $19 (Tk 1,200) on every connection.

Bangladesh, with a population of 140 million, has 5.4 million cellular phone users and five mobile operators.

Egypt-based Orascom Telecom bought Mobile phone operator Banglalink this year, after acquiring the country's tiny operator Sheba Telecom, had planned to invest $180 million in 2005 to increase its network.

The Pacific Bangladesh Telecom Ltd. (PBTL) with its new investor, Singapore Telecommunications Ltd. (SingTel), planned to spend a further $150 million to boost its subscriber base.

SingTel, Southeast Asia's largest mobile phone company, bought a 45 percent stake in PBTL for $118 million last month (May).

Bangladesh's largest mobile phone operator is GrameenPhone Ltd., majority-owned by Norway's Telenor. It has a market share of about 62 percent.

Telekom Malaysia International Bangladesh has a 26 percent market share, while PBTL has 6.7 percent and state-owned Teletalk Bangladesh Limited, launched in late March, has 40,000 subscribers.