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[🇧🇩] ICT Industry in Bangladesh
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Information technology in Bangladesh

The information technology sector in Bangladesh had its beginnings in nuclear research during the 1960s. Over the next few decades, computer use increased at large Bangladeshi organizations, mostly with IBM mainframe computers. However, the sector only started to get substantial attention during the 1990s. Today the sector is still in a nascent stage, though it is showing potential for advancement. Nonetheless, Bangladesh IT/ITES industry has fared comparatively well by achieving US$1.3 billion export earnings in FY 2020-21 and holding US$1.4 billion equivalent market share in the local market contributing 0.76 per cent to the GDP creating more than 1 million employment opportunities so far amid Covid-19 havoc that suddenly shattered businesses last year. Consequently, riding on the successes of IT/ITES sector-supported export-led industries as well as pro-private sector and conducive policies pursued by Bangladesh Government, the country is now poised to become a Developing Country by 2026, as recommended by the United Nations Committee for Development Policy (UNCDP), besides, Bangladesh now seeks to transform itself into a knowledge-based and 4IR-driven cashless economy, aiming to become a developed country by 2041. The Bangladesh government has formulated a draft 'Made in Bangladesh– ICT Industry Strategy' aimed at turning Bangladesh into an ICT manufacturing hub, enhancing export of local products, attracting foreign investment and creating employment proposing to implement in three Notif-info terms— short term from 2021 to 2023, mid-term from 2021 to 2028 and long term from 2021 to 2031 for implementation of the 65 action plans.

History

The first computer in East Pakistan was an IBM mainframe 1620 series, installed in 1964 at the Dhaka center of the Pakistan Atomic Energy Commission (later the Bangladesh Atomic Energy Commission). Computer use increased in the following years, especially after the independence of Bangladesh in 1971; more-advanced IT equipment began to be set up in different educational, research and financial institutions. In 1979, a computer centre, later renamed Department of Computer Science & Engineering, was established at Bangladesh University of Engineering and Technology (BUET); the centre has been playing a pivotal role in Bangladeshi IT education since its inception. Through the introduction of personal computers, the use of computers witnessed a rapid increase in the late 1980s. In 1985, succeeding several individual initiatives, the first Bengali script in computers was invented, paving the way for more intense computer activities. In 1995, use of the Internet began and locally made software started to be exported.

In 1983, the Ministry of Science and Technology established a National Computer Committee to create the required policies. The committee was also responsible to carry out programs to expand and promote the efficacious use of the sector. In 1988, the committee was replaced by the National Computer Board. In 1990, the ministry reformed the board and reconstituted it as the Bangladesh Computer Council to monitor computer- and IT-related works in the country.

ICT industry

The ICT industry is a relatively new sector in the country's economy. Though it is yet to make tangible contributions in the national economy, it is an important growth industry. The Bangladesh Association of Software and Information Services (BASIS) was established in 1997 as the national trade body for software and IT service industry. Starting with only 17 member companies, by 2009 membership had grown to 326. In a study among Asian countries by Japan International Cooperation Agency in 2007–08, Bangladesh was ranked first in software and IT services competitiveness and third in competencies, after India and China. The World Bank, in a study conducted in 2008, projected triple digit growth for Bangladesh in IT services and software exports. Bangladesh was also listed as one of the top 30 Countries for Offshore Services in 2010–2011 by Gartner. The Internet penetration has also grown to 21.27 percent in 2012, up from 3.2 percent three years prior.

The Information and Communications Technology (ICT) sector of the country has maintained 57.21 percent export growth on an average over the last nine years since 2009. In the fiscal year (FY) 2016–17, Bangladesh ICT sector registered export earnings worth US$0.8 billion from the global market and US$1.54 billion from the domestic market span – thereby making around one percent contribution to the gross domestic product (GDP). The ICT sector has created around three hundred thousand job opportunities so far. ICT exports of the country are also projected to reach US$5 billion by 2025.

As the Internet usage increases, the government expects the IT sector to add 7.28 percent to GDP growth by 2021.
 
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Can Starlink’s entry be another turning point?

Two of the greatest minds in Bangladesh -- Dr Muhammad Yunus and Iqbal Quadir -- came together for an unconventional idea: providing mobile phones, then exorbitantly priced status symbols for the urban elite, to poor rural women in the mid-90s.

What they envisioned was made possible by the entry of a Norwegian telecommunications company onto the shores of the Bay of Bengal and their idea turned out to be a game-changer.

Telenor's arrival through Grameenphone was not just a means of poverty alleviation for many women, it was a pivotal moment that transformed the country's telecommunications landscape.

Its entry, along with the efforts of other mobile operators, democratised mobile connectivity, expanded rural access and played a crucial role in bolstering economic growth.

Today, a similar disruption could be on the horizon with Starlink, Elon Musk's satellite-based internet service.

With Chief Adviser Professor Yunus recently engaging in talks with Elon Musk, followed by his post on X and Musk's "looking forward to it" response, and the telecom regulator's draft guidelines for NGSO satellites being released, Starlink's entry seems on the horizon.

The pressing question now is whether its arrival will be as transformative as Telenor's. And while the answer remains uncertain, one thing is clear: it undoubtedly poses itself as a potential watershed moment.

Starlink has the potential to revolutionise broadband internet the same way Grameenphone impacted mobile access in rural areas.

However, since spectrum-dependent mobile services require heavy infrastructural investment for wide deployment, internet access remains unreliable in remote regions despite high mobile penetration.

The country's telecom policy has also long hindered broadband expansion into remote areas.

However, Starlink's satellite-based model removes the need for costly infrastructure, bringing high-speed connectivity to underserved regions and unlocking new economic opportunities.

Whereas Grameenphone's entry empowered rural entrepreneurs, particularly women, Starlink could represent a quantum leap for digital businesses, e-commerce, remote work, and online education -- sectors that remain constrained by poor internet access.

Even in cities, entrepreneurs and freelancers who rely on high-speed internet often find existing services inadequate. Internet speed and reliability remain major concerns, limiting productivity and growth in the digital economy.

During the July revolution, when nationwide internet shutdowns were imposed by the Awami League government to quell a mass uprising, some executives sent officials abroad to procure Starlink kits, using them with roaming services from other countries.

This highlights the growing demand for an alternative, resilient connectivity solution beyond traditional telecom infrastructure. Besides, Starlink also offers the invaluable benefit of enhancing disaster-resilient communication services.

When a cyclone, flood, or other natural disaster strikes, affected communities often lose access to mobile networks when they need it most. This disruption occurs primarily due to prolonged power outages, as most base transceiver stations have battery backups lasting only four to eight hours.

As a result, thousands of towers go offline, leaving people stranded without communication.

Starlink, being satellite-based, could provide uninterrupted internet access during such crises, ensuring more effective disaster response and greater resilience.

Besides, with Starlink, Bangladesh's burgeoning digital economy -- particularly in freelancing, software exports and AI -- could significantly leap forward.

Reliable high-speed internet would eliminate key bottlenecks for IT professionals and start-ups, strengthening Bangladesh's position in the global digital economy.

Although Starlink could disrupt the broadband market by challenging established ISPs and mobile internet providers, it will also foster competition and improve service quality. Considering the greater interests of the internet business, there should be no barriers to the entry of new technology.

Yet, regulatory hurdles are now the main obstacle hindering Starlink from making a smooth entry.

The proposed guidelines for NGSO (Non-Geostationary Satellite Orbit) Systems present two major concerns -- legal interception and bandwidth procurement from International Internet Gateways (IIGs).

Firstly, the requirement for lawful interception contradicts Starlink's fundamental design and commitment to privacy. Unlike traditional ISPs and mobile operators that operate within a nation's regulatory framework, Starlink's encrypted, direct-to-satellite model makes centralised interception difficult.

Insisting on such compliance risks deterring investment or delaying its entry.

Secondly, mandating bandwidth purchases from IIGs undermines the very purpose of Starlink -- independent, direct satellite connectivity. This not only adds unnecessary costs but also contradicts global best practices for satellite broadband deployment.

Regulators must adopt a smarter, future-proof approach instead of applying legacy telecom regulations to disruptive technologies. BTRC officials must move beyond outdated telecom-era regulations and embrace innovation.

Forcing Starlink into legacy frameworks like IIG bandwidth procurement and legal interception shows a lack of adaptability that stifles progress instead of fostering competition and digital inclusion.

Besides, the NGSO market is rapidly evolving, with several key players competing to provide global broadband services.

SpaceX's Starlink leads with over 7,000 satellites in orbit and a customer base exceeding 4.6 million as of 2024. Amazon's Project Kuiper has received preliminary approval to launch over 3,000 satellites and aims to enter the market soon. OneWeb, backed by Eutelsat, is deploying a 'constellation' to offer global connectivity.

Mobile operators, best positioned to partner with satellite internet providers, are already on the move as well. Banglalink and Robi Axiata are currently in discussion with operators such as Starlink and OneWeb to explore potential collaborations in Bangladesh.

Given these factors, Bangladesh should have facilitated the entry of all such NGSO operators to foster competition.

If regulatory barriers are removed, satellite internet could be offered for just $10 to $30 per month, similar to Kenya, but far lower than the United States' monthly service fee of $120.

Additionally, one kit, which can currently be purchased for over $500 or rented for $15 in Kenya, can be used by a whole community.

A Starlink connection can be shared with neighbours by extending Wi-Fi using routers or extenders, setting up a wired ethernet connection, or using a mesh network for broader coverage.

This means that a small community could chip in to buy or rent one kit and share the cost of a subscription among themselves, shaping its entry into Bangladesh as a transformative moment.​
 
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Govt for white paper on ICT sector
Staff Correspondent 19 February, 2025, 00:22

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Key target to bring Hasina back to face trial: CA office

Chief adviser’s press secretary Shafiqul Alam on Tuesday said that the interim government would soon form a high-level committee to investigate corruption and irregularities committed in the information and communication technology sector during the regime of deposed prime minister Sheikh Hasina.

He came up with the information at a press briefing held at the Foreign Service Academy in the capital Dhaka on the day.

Shafiqul said, ‘Many reports on corruption in the ICT and digitalisation were published in newspapers and we read those. Chief adviser Professor Muhammad Yunus wants a whitepaper to be published to this end.’

He said that the high-powered body having the world’s renowned economists and ICT experts would be formed within a day or two to prepare the whitepaper.

The committee will probe how corruption was committed and how much money was laundered from the ICT sector in the name of digitalisation during the ousted regime, he said.

He said that the white paper committee would present the white paper within two months.

Shafiqul also spoke about the issue of Bangladesh’s labour restrictions in the United Arab Emirates.

He said that during the World Government Summit in Dubai in February 11-13, the chief adviser had spoken with several UAE ministers regarding the ban on Bangladeshi workers.

The ban would soon be lifted, allowing Bangladeshis to return to the UAE workforce, he said, adding that the government was actively working on resolving this issue.

In response to a question regarding Hasina’s extradition, Shafiqul also said the interim government’s key goal was to bring ousted prime minister Sheikh Hasina back to Bangladesh and put her on trial.

He said that the government intended to hold Hasina accountable for her crimes against humanity.

Referring to the recent United Nations Human Rights Commission report which accused Sheikh Hasina of committing crimes against humanity, Shafiqul also stated that the report outlined the serious nature of these offences.

‘This is a grave crime,’ he remarked, adding that there has been significant pressure on Hasina following the findings in the report.

He cited a survey conducted by India Today that revealed that 55 per cent of respondents wants Sheikh Hasina send back to Bangladesh, while a smaller percentage advocates for her transfer to another country and only about 16-17 per cent of people wants Hasina remain in India.

Regarding a Committee to Protect Journalists report which highlighted the threats and attacks faced by journalists in Bangladesh, Shafiqul acknowledged the importance of press freedom.

Welcoming the recent CPJ report, he said that sometimes observations were made on the basis of isolated incidents.

He invited the CPJ to visit Bangladesh and observe the state of media freedom in the country, saying that Bangladesh had now one of the highest levels of media freedom in its 53-year history and the interim government never threatened any newspaper for publishing reports.​
 
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BTRC limits bandwidth imports from India

Bangladesh Telecommunication Regulatory Commission (BTRC) has capped bandwidth imports from India at 50 percent of the country's consumption of 6,500 Gbps to reduce reliance on a single source and promote diversified international connectivity.

Currently, about 60 percent of Bangladesh's bandwidth consumption is imported from India by international internet gateway (IIG) operators through international terrestrial cable (ITC) companies.

Bangladesh Submarine Cable PLC (BSCPLC) currently supplies the remaining 40 percent of the bandwidth for internet.

BTRC Chairman Emdad ul Bari said the regulator aims to further reduce bandwidth imports from India to 30 percent, while increasing the share of submarine cable-supplied bandwidth to 60 percent through the BSCPLC.

The remaining 10 percent would be sourced via satellite, he added.

This move comes through an amendment to the IIG guidelines, according to the BTRC documents.

Md Ariful Huq, deputy general manager for sales and marketing at the BSCPLC, said they were prepared to supply additional bandwidth immediately.

Under the revised framework, the IIG operators can maintain up to 10 percent of their total connected bandwidth as backup capacity via satellite earth station or VSAT until an alternative international long-distance communication (ILDC) route was available.

A satellite earth station refers to any ground station that communicates with satellites.

The VSAT (very small aperture terminal) is a specific type of satellite earth station that uses small dish antennas to transmit and receive data via satellite, typically used in remote areas where other forms of internet access are limited.

Operators must adhere to service level agreements (SLAs) and obtain prior approval from the BTRC to secure backup bandwidth via satellite.​
 
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Digital hub to boost trade, investment
Editorial
Published :
Feb 26, 2025 00:46
Updated :
Feb 26, 2025 00:46

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Undeniably, navigating the labyrinth of multiple desks and procedures to clear imported cargoes and ship export consignments has been a notoriously messy, tardy and costly affair so far. So, doing business encounters enormous hurdles and as such it is a disincentive, especially for foreign direct investment (FDI). As a way out of this bureaucratic maze, the National Board of Revenue (NBR), is reported to have launched an online export-import hub recently to provide customs and tariff-related information from a single centralised platform. Evidently, the aim of this digital hub is to make business operations smoother for international trade. Though belated, it is still a welcome development that the digitalised information providing system could finally see the light of day.

The need for a centralised information portal for external trade facilitation cannot be overstated. How the country was falling behind its regional as well as international competitors in trade and investment was made plain by the operator of a Korean investor in Bangladesh who spoke at the launching event of the digital hub in question. It is indeed a revelation that the said foreign investor admitted how he gave preference to its business operation in Vietnam instead of Bangladesh when it came to allocating funds while receiving export orders. It was for the simple reason that Bangladesh was far behind Vietnam regarding lead time. Evidently, the inordinate delays in processing export-related information and documentations at the customs were to blame for this. Now, the services the digital platform would provide include what is called Harmonised System (HS) code-specific document requirements, information on necessary certificates for imports and exports, applicable tariff rates and so on. It is believed the accessibility of the digital customs and tariff-related information hub by all concerned would also facilitate business operations of new entrants with the growth of national economy. In fact, it was a long-felt demand of the new businesses since earlier only big businesses could afford the necessary facilities including certificates for obvious reasons resulting in the growth of so many oligarchs in the country. Expectedly, the centralised online system to access customs and tariff-related information would break the barriers for the newcomers to develop and excel. Also, to facilitate submission of customs-related documents by compliant businesses certified as Authorised Economic Operators (AEOs), the NBR is learnt have launched a digital platform within the so-called Automated System for Customs Data (ASYCUDA) world. Obviously, the digital module will immensely benefit the AEO licence-holders from the customs authority since they would now be able to bypass physical inspection and transport their export-import cargo directly through the green channel from the ports to their factories or warehouses thereby saving time and costs.

Notably, the NBR has reportedly awarded AEO status to 9 out of 17 highly compliant businesses so they would be able to use the green channel to carry out overseas trade smoothly. The good news is that remaining eight firms will be eligible for the online service once they meet the necessary regulations involved. But for the business community to get the facility, full implementation of the AEO system would be necessary. Again, the system will also be of help for the regulatory authority, NBR as it would reduce a lot of work pressure on it.

In addition to the AEO module, the digital hub also aligns with the Customs Strategic Plan 2004-28 as part of integration with customs modrnisation efforts. Introduction of the digital hub to facilitate trade through streamlining customs procedures would hopefully boost business confidence and investment in the economy. However, efficient and seamless operation of the digital hub to provide services as and when required will remain essential precondition.​
 
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Bangladeshis burdened with high internet taxes
GSMA says it exacerbates digital divide

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Bangladeshi citizens were burdened with some of the highest taxes on internet usage in Asia in 2024, with a combined tax rate of 39 percent on internet services, according to a recent report by GSMA, a non-profit organisation that represents the interests of mobile network operators worldwide.

This high tax rate, comprising 21 percent in sector-specific taxes and 18 percent in VAT, exacerbates the digital divide and poses a significant barrier to the country's digital transformation efforts, the report said.

The report, titled "Enabling Mobile Network Investment: Policy Reforms for Bangladesh", reveals that Bangladesh's internet tax rate far exceeds that of its regional peers.

Nepal imposes a 26 percent tax on internet services, Sri Lanka 23 percent, India 18 percent, the Philippines 12 percent, and Indonesia 11 percent.

The GSMA report highlights that the telecom sector in Bangladesh faces additional financial challenges, including notably higher corporate income tax rates compared to other industries.

Publicly traded telecom companies are taxed at 40 percent, while non-publicly traded companies face a 45 percent rate—higher than rates in India and comparable to those applied to industries like tobacco.

Furthermore, telecom operators are subject to a minimum turnover tax of 2 percent, significantly higher than the 0.6 percent applied to other sectors.

The lack of a credit mechanism for input taxes further increases operational costs, reducing profitability for telecom operators. For instance, operators incur an additional 7.5 percent cost because the Bangladesh Telecommunication Regulatory Commission does not register them for VAT.

The report underscores that Bangladesh stands at a critical juncture in its journey towards becoming a trillion-dollar economy and achieving developed nation status.

The telecom sector, as a vital enabler of this transformation, is expected to drive economic growth, foster innovation, and ensure digital inclusion.

However, achieving these goals will require substantial investments in telecom infrastructure, which are currently hindered by high taxes and regulatory challenges.

Key obstacles identified in the report include a complex licensing framework that increases administrative burdens, restrictions on infrastructure ownership and sharing that create inefficiencies, and short licence durations that complicate long-term investment planning.

Additionally, opaque penalties, retrospective audits, and prescriptive regulations create uncertainty for investors and limit market-driven growth.

To address these challenges, the GSMA recommended creating an attractive business environment by streamlining licensing processes, extending licence periods, and allowing mobile operators to deploy their own infrastructure.

It also suggests reforming the fiscal framework by reducing sector-specific taxes, aligning corporate taxes with other industries, and introducing transparent tax policies.

Establishing a progressive regulatory framework with market-driven regulations and improving transparency is another key recommendation.

Finally, the report calls for government enablers for investment, including regulatory stability, fiscal support, and prioritised digitalisation initiatives.

The report emphasises the need for collaboration among government bodies, telecom operators, and investors to build a future-ready telecom ecosystem.

"By addressing these challenges and implementing these reforms, Bangladesh can unlock the full potential of its telecom sector, ensuring it becomes a cornerstone of the nation's journey to a developed and digitally inclusive economy," the report concludes.​
 
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