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The Telecommunication Sector in Bangladesh Essay

Words: 4953, Paragraphs: 35, Pages: 17

Paper type: Essay

Asian Development Bank IDCOL Analogue Mobile Phone Systems Bangladesh Broadcasting Telephone & Technology Bangladesh Association of Software & Information Services IPRs BCC BCS BOO BOT BRTA Bangladesh Computer Council ISPs Bangladesh Computer Samity IT Build, Own and Operate ITU Build, Operate and Transfer ITX Bangladesh Rural Telecommunication Authority Bangladesh Telegraph & Telephone Board Commonwealth Development Corporation Code Division Multiplex Access OECF CeBIT An Information Technology and Telecommunication Fair (Held annually in Hanover) Canadian International Development Agency China National Machinery and Equipment Import and Export Corporation UK Department for International Development Executive Committee of the National Economic Council Export Promotion Bureau TRIPS FBC GDP GIS GOB GP GSM IDA First Bangladesh Consulting Ltd. Gross Domestic Product Geographical Information Systems Government of Bangladesh GrameenPhone Ltd.

Global Systems for Mobile International Development Agency VAT VOIP VSAT WIPO Trade Related Aspects of the Intellectual Property Rights Value Added Tax Voice Over Internet Protocol Very Small Aperture Terminal World Intellectual Property Organisation World Trade Organisation Overseas Economic Co-operation Fund of Japan Pacific Bangladesh Telecom Limited Private Sector Participation Public Switched Telephone Networks Personal Hand-phone System Paging & Radio Trunk Subscribers TM International (Bangladesh) Technology Resources Industries Bhd. MHz MOPT International Telecommunications Union International Trunk Exchange MegaHertz Ministry of Posts and Telecommunications Memorandum of Understanding Nation-wide Dialing Information Technology Internet Service Providers IFC IIFC BASIS Infrastructure Development Company Limited International Finance Corporation Infrastructure Investment Facilitation Center Intellectual Property Rights BTTB CDC MOU NWD CDMA PBTL PSP PSTN CIDA CMEC PHS PRTS TMIB DFID ECNEC TRI EPB WTO Telecommunications and IT Sector in Bangladesh Page 5 LIST OF FIGURES AND TABLES Figure 1. 1 Figure 2. 1 Figure 6. 1

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Telecommunication Status in Bangladesh as of December 2000 Organizational Structure of the Telecom Sector Profile of Private Capital Inflows and outflows in the Telecommunications Sector 5 6 14 Table 2. 1: Table 3. 1: Table 5. 1: A Quick Look at the Telecom Scene in Bangladesh and its Asian Neighbours BTTB Expansion Programme Telecommunication Operators in Bangladesh 8 10 13 Telecommunications and IT Sector in Bangladesh Page 6 1. THE SIZE AND NATURE OF THE TELECOMMUNICATIONS AND INFORMATION TECHNOLOGY SECTORS An Overview The current state of the telecommunications and information technology infrastructure in Bangladesh is extremely poor, with only 0. 6 telephones per 100 people. Not even 10% of the population has access to a telephone, not to speak of their owning one.

Ironically, the country was the first among its Asian neighbours to open up the sector to private sector investments about a decade ago, but it has now fallen far behind some of its neighbours in reforming the telecom sector. Since telecommunications provide the backbone for information technology, the growth of the IT sector is naturally constrained. The country has made significant progress in some major areas such as food supply, and has become almost self-sufficient in food. With an increase in general economic growth over the recent years, the acute shortages of basic infrastructure facilities like telecom and IT are increasingly felt by a larger percentage of the electorate.

So, it is expected that soon after the impending general election is over, the new Government will get on with longawaited reforms of the sector, and gradually open up the sector fully to the private sector. Consequently, significant investment opportunities may open up for European SME investors. The Government’s declared intention is to increase the number of telephones by one million within next 2-3 years, and significantly improve the quality of the telecom network to give needed support to the IT sector which has been declared as a “thrust sector” that accords many fiscal incentives to the sector. Potential investors, however, must be aware things often do not happen very quickly in Bangladesh and other developing countries. So, they have to be patient and persistent in reaching success.

Opportunities are likely to emerge in almost all facets of telecom and IT, including network equipment, terminal equipment, design and delivery of the whole gamut of telecom and IT services, consulting, training, and management services, and the European SME investors will be welladvised to develop appropriate strategy for targeting this market. With a population of 130 million, Bangladesh is one of the most densely populated countries in the world but its telecommunications and information infrastructure is among the weakest in Asia. At the end of 2000, only about 837,000 telephones were in service implying a teledensity of about 0. 6 telephones per 100 people.

Almost 200,000 potential customers are currently on the waiting list for telephone service. The status of telecommunications in Bangladesh at a glance is provided in Table 1. 1. Table 1. 1 Telecommunication Status in Bangladesh as of December 2000 Number of Telephones BTTB (Govt. Telephone Board) Private Operators (including cellular phones) Density of Telephone Registered Pending Demand International Voice Circuits International Trunk Exchanges (ITX) Total International Circuits Nation Wide Dialling Circuits (NWD) Network Digitalisation VSAT Service Providers Internet Service Providers (ISPs) Source: BTTB and private telecom operators 837,000 527,000 310,000 0. 6% 192,100 2,107 3 4,000 23,000 80% > 50 > 100

The share of post and telecommunication sector in the country’s GDP, however, increased from 0. 62% in 1994-95 to 0. 84% in 1998-99. Telecommunications and IT Sector in Bangladesh Page 7 2. REVIEW OF PRINCIPAL TELECOMMUNICATIONS AND INFORMATION TECHNOLOGY SUBSECTORS Figure 2. 1 below broadly portrays the rather complicated organizational structure of the telecom sector. MOPT is the policy making body of the Government of Bangladesh (GOB) for telecommunications. In the absence of a formal regulator, MOPT is also responsible for 2. 1 Telecommunications Sub-Sector Currently, the telecom sector in Bangladesh is dominated company, by a state-owned telephone and Bangladesh Telegraph pectrum management, and regulation of BTTB and private sector rural and cellular operators. The value-added service providers such as VSAT and Internet Service Providers (ISPs) are also supposed to be regulated by MOPT. Besides a government-owned a cable is telephone handset manufacturing and PBXs assembly company (TSS), and manufacturing virtually no company other (CSS), telecom there Telephone Board (BTTB), which has a virtual monopoly in fixed line telephone service, and which enjoys monopoly rights in domestic long distance and international (terrestrial) services. Gradual privatisation of the sector started in 1992 when Bangladesh Rural equipment manufacturing activity in Bangladesh.

Although MOPT is the formal regulator of BTTB, it apparently does not have any power to regulate BTTB tariffs, which are supposed to be approved by the Ministry of Finance. Moreover, major spending decisions of BTTB, for expansion or maintenance of the network, have to be approved by the Planning Telecommunications Authority (BRTA) was licensed to provide telecommunications to 200 rural districts, followed by a second operator sometime later. But these two companies had only limited success and poor levels of interconnection with the BTTB network. Figure 2. 1 ECNEC Planning Commission Private Sector Value-Added and Internet Service Providers Ministry of Finance MOPT Private Sector Cellular and Rural Telephone Operators – Policy – Regulation – Spectrum Management (FWB) MOPT Legend

BTTB Ministry of Post and Telecommunications Bangladesh Telegraph and Telephone Board Telephone Shilpa Sangstha Executive Committee of the National Economic Council Cable Shilpa Sangstha Frequency Wireless Board CSS BTTB TSS TSS ECNEC Voice Data CSS FWB Telecommunications and IT Sector in Bangladesh Page 8 Commission, and ECNEC, operating under the Prime Minister’s Office. BTTB is mostly concerned with voice over 300,000 telephone lines in rural and urban Bangladesh, 90% of which are cellular mobile and radio operator trunking phones, with GrameenPhone, the most successful private sector (www. grameenphone. com) claiming to now have some over 200,000 customers.

Since there is still a large unmet demand for telephone lines, this sector has very large potential for expansion and is expected to attract considerably more investment from both large and small investors, once some telephony. It has a small data services group with useful capacity, but BTTB does not actively market its services. It also offers Internet access to about 3,500 users, many internal. The proposed National Telecommunication Policy of 1998, which is yet to be fully adopted by the Government through a new Telecommunications Act, called for mobilisation of both public and private sector resources to develop the telecommunications sector, and increasing private sector participation (PSP).

In addition to BTTB, there are at present seven private sector operators licensed to provide basic telecom services and value added services including paging and cellular services. They include, as stated earlier, two rural operators; Systems one Analogue based Mobile cellular Phone service (AMPS) However, expansion in the sector is still highly constrained by the constant difficulties experienced by the Bangladesh Telephone and Telegraph Board (BTTB) to provide the necessary inter-connectivity, with one complete collapse of the network having been experienced in 2000, which resulted in all of the subscribers being cut off. fundamental policy decisions such setting up a telecom regulatory body, and allowing private sector to set up an alternate long-distance network within the country, etc. are taken and implemented.

BTTB has unsuccessfully proposed several transmission link upgrade projects valued at US$152 million, including fibre optics, digital spur links and digital microwave links, all of which have failed due to funding constraints. However, BTTB has also requested the Government to arrange funds from selected donors, including the World Bank, who would prefer to see the projects offered to the private sector. The absence of an independent regulatory body is seen as an impediment to greater private sector investment in the telecom sector. The Government of Bangladesh has realised that the country is lagging significantly behind some of its Asian neighbours (as portrayed in company that is providing cellular mobile

Opening up of the telecommunications sector has already created considerable interest from overseas firms who would like to run mobile cellular networks, operate rural telephone exchanges, provide paging and trunking facilities and become internet service providers. service to subscribers in Dhaka and Chittagong, and also providing Code Division Multiple Access (CDMA) service to both Dhaka and Chittagong. There are also three GSM cellular companies that operate in Dhaka, Chittagong, and Khulna, while paging and radio trunking telephone services are provided by a single operator in Dhaka, Chittagong, and Khulna. Till December, 2000, these private operators appear to have installed Telecommunications and IT Sector in Bangladesh Page 9 Table 2. A Quick Look at the Telecom Scene in Bangladesh and its Asian Neighbours Competition in Country Independent Regulat or No Yes Yes Yes Yes Yes Yes No Fix ed Cellul ar NL D1 Internation al No Yes No 7 IS P Ye s Ye s Ye s Ye s Ye s Ye s Ye s Ye s Dominant Operator VOIP Lega l? Separatio n of Policy and Regulatio n No Yes Yes Yes Yes Yes Yes No Teledensit 2 y Privatisation in 3 Progress Banglade sh India Pakistan Sri Lanka Nepal Thailand Malaysia China No Ye s No Ye s Ye s Ye s Ye s Ye s 7 Yes Yes Yes Yes Yes Yes Yes Yes No Ye s No 7 Govt. Govt. Corp. Govt. Corp. Govt. Corp. Privatised4 Govt. Corp. 5 Privatised 4 6 No No No ? ? Yes ? 6 0. 6 3+ 4+ 4+ 1+ 4+ 22+ 20+ No Yes Yes Yes Yea Yes Yes Not fully 6 Ye s Ye s Ye s Ye s Ye s

Yes Yes Yes Yes Yes 6 Govt. Corp. Yes 1. 2. 3. 4. 5. 6. 7. Nationwide long distance service on fixed line phones. The world average is 11 +, and the developed country average is about 55. Privatisation of current/former government monopolies in telecom services. Privatised former govt. monopoly. Privatisation in progress. Autonomous corporation. Monopoly expires in 2002. Sources: ITU website, and websites of regulators or dominant operators of the relevant countries. Note: The table is quoted from a market study commissioned through IIFC by MOPT and conducted by CanadaBangladesh Infrastructure Consultants of Ottawa, Canada. in April 2001 Table 2. ) in building a telecom infrastructure suitable for giving thrust to the IT sector. So, recent Government telecommunications policy includes long-term plans to privatise BTTB and to install fibre optic and microwave links. The Bangladesh Government recently announced plans to increase the number of telephone lines to 1. 3 million by the year 2002, and to 1. 6 million by 2005. 2. 2 Information Technology (IT) Sub-Sector The IT sector in Bangladesh is relatively small compared to other South Asian and South East Asian countries, such as India, Pakistan, Philippines and Sri Lanka. However, it is believed that this sector could have considerable growth potential, if it were to receive better support from the Government.

Consequently, it may offer increasing opportunities to small and medium sized investors from Europe. Up to now, IT investment in Bangladesh has mostly been confined to information processing by Bangladeshi firms who developed business alliances with international firms, mostly from America, for data entry, medical forms processing etc. However, growth has proven to be very slow, on account of the poor infrastructure in Bangladesh for information technology, which includes poor connectivity, high costs of data transmission, poor productivity, lack of trained programmers and Following intense lobbying from the Bangladesh business community, the Government of Bangladesh has now declared information technology to be a “Thrust Sector”.

This in practice means that IT should be given the highest level of support from the government, in the form of zero customs duty on import of IT equipment, and other fiscal incentives. Telecommunications and IT Sector in Bangladesh Page 10 managers, and poor market promotion by Bangladeshi firms. Several European companies, over the last five years or so are known to have considered investment in this sector in Bangladesh, as they sought to source reliable and cheaper information processing services. One result of declaring IT as a Thrust Sector, is that duties on both computers and components imports have been eliminated, which has already led to reductions in retail prices of up to 40% on assembled computers.

The weak telecommunications infrastructure is also starting to be strengthened as the government has opened up installation of very small aperture terminals (VSATs) to the private sector, in order to make the use of the Internet cheaper and to lower the cost of data transmission to allow Bangladeshi information processing services to compete with other Asian countries. Since March 2000, there are no longer any restrictions on getting licenses from BTTB for the installation of VSATs and the annual license fee has been reduced from US$8,000 to US$3,500. The Government is also investing in a digital data network, which will enable Internet service providers to increase transmission speeds from 128 kilobits per second to two megabits per second. The annual domestic technology, market which size for information includes omputer hardware, peripherals and software was estimated by the US Embassy in Dhaka to be worth about US$20 million a year, which is rapidly increasing at a rate of about 25% per year. There are approximately 200,000 desktop PCs in Bangladesh with sales dominated by locally assembled clones, with many local computer assemblers importing mother boards, with most components from either Taiwan or South Korea. Vendors are now targeting small offices and home users. The growing number of computer training schools that are now operating in One particular area of interest for Europeans is geographical information systems (GIS), which are key components in various environmental impact assessment studies needed for project development as well as for project planning.

Since high levels of data entry and data management are key components of GIS, European firms wishing to offer these services in Bangladesh, try to develop business collaboration with local partners. In many cases, the European partner may supply key specialised equipment for digitising plus training to use it. Bangladesh is expected to rapidly increase the number of computer personnel available. Since the introduction of Internet services in Poor data communications infrastructure has been responsible for very little European investment in Bangladesh, in either software development or in computing services. Moreover, software piracy has also been a major deterrent to investment in this area.

Strong pressure is now being put by foreign governments for the final implementation of the strong intellectual property rights (IPR) laws. These laws, which have been needed for some time, are endlessly debated by the Government of Bangladesh, but have not been implemented to date. 1996, a growing number of businesses and individuals have been buying computers for their communication needs. Management is also being strengthened in a number of IT firms as many young Bangladeshis, who have studied and worked in both North America and Europe, have returned home and set up companies in Bangladesh. To date no software or computing services firm has received ISO 9000 certification, or Telecommunications and IT Sector in Bangladesh Page 11 even attempted to obtain it.

This puts Bangladesh at a competitive disadvantage against neighbouring countries such as India, Pakistan, Philippines, Sri Lanka, where an increasing number of firms are obtaining certification. 3. LIST OF MAJOR LOCAL COMPANIES AND REVIEW OF THEIR EXISTING COLLABORATIONS WITH FOREIGN FIRMS 3. 1 Telecommunications 3. 1. 1 Public sector telecommunications The Bangladesh Telegraph and Telephone Board (BTTB) is the main operator of telephone services in Bangladesh and has until recently maintained a monopoly position on domestic wire services, international (terrestrial) and satellites, with all international dialing being retained as a Government monopoly.

In 1983, BTTB started to install a national automatic long distance telephone dialing system to link all major cities of the country and by June 1997, some 100 stations including all 64-district headquarters and 10 Thana headquarters and 36 Thanas were brought under this system. In order to meet the broad objective of the National Telecommunication Policy of 1998, which sets a target to substantially increase the number of telephone lines in service by 2010, BTTB has tried to plan a number of programmes to increase its telephone capacity, replace and modernise existing exchanges. However, BTTB’s development plans have been considerably constrained by lack of financial resources. The ongoing BTTB expansion programme to allow Bangladesh to raise its telephone Table 3. 1 BTTB Expansion Programme Name of Programme and Major Equipment Vendor 00,000 lines digital telephone project with Bond Financing ALCATEL Installation of 39,000 lines in Chittagong with French funding, ALCATEL SADE Programme for 7 district headquarters by Italtel Linea Greater Dhaka (Phase – II) telephone project (OECF funding from Japan), Ericsson 140,000 lines digital telephone lines at district headquarters (Suppliers credit from China) Emergency Expansion of 6 NEC Digital exchanges in Dhaka Installation of 2000 line digital exchange at Feni (Italtel Linea) Digital exchange at Narayanganj and Sirajganj under RR Program (Italtel Lines UT Model) Installation of digital exchanges at Chapai Nawabganj, Naogaon and Thakurgaon Total Telephone Exchange Capacity

Replacement 66,000 8,860 9,900 17,000 40,000 Expansion 134,000 30,140 10,600 50,500 100,000 12,000 1,600 5,700 1,200 150,260 400 2,300 1,800 370,740 Total 200,000 39,000 20,500 67,500 140,000 12,000 2,000 8,000 3,000 521,000 Source: Telecommunications in Bangladesh. Paper presented by Fazlur Rahman of Multi Media, at the Workshop on Internet: South Asian Realities and Opportunities, Dhaka, April 5-8, 1999 Telecommunications and IT Sector in Bangladesh Page 12 capacity to at least 1,000,000 lines by the year 2000, was presented at the Workshop on the Internet: South Asian Realities and Opportunities held in Dhaka from April 5-8, 1999, and is given above in Table 3. 1

BRTA, after winning the concession to provide rural telephone services, developed a relationship with Nokia from Finland, who took total responsibility under a turnkey contract to provide digital linkages to 165 rural headquarters. In turn, Nokia then developed business collaboration with Cosmos Marketing Consultants to provide management and operational support. Ericsson has in 2000 signed a five year contract with TM International (Bangladesh) Ltd (TMIB) for the upgrading of their GSM cellular network. TMIB, who hold a 15 year licence to build, own, operate and maintain a GSM network in Bangladesh, launched their network in 1997 using an infrastructure supplied by Alcatel.

At the moment, there is somewhat of a stand-off between the Government of Bangladesh (GOB) and the World Bank. The World Bank wants GOB to appoint an “independent” regulator for the telecom sector before any further reforms are introduced. But GOB has not agreed to this condition so far, and consequently, the World Bank has put on hold any further funding by the Bank, to support the growth of the telecom sector. In 1996, in order to develop international VSAT services to facilitate global high-speed data communications for their subscribers, BTTB made an agreement with Pakistan Datacom to install and operate VSATs in Bangladesh on a 5 year BOT (Build, Operate & Transfer) basis.

Under this arrangement Pakistan Datacom contracted to supply, install, operate and maintain VSATs in Bangladesh on behalf of BTTB and by mid 1997, five subscribers were given VSAT data based circuits, with subscribers being charged a fixed monthly rent for each VSAT circuit. BTTB had been forced to develop a number of operational collaborations to allow not only an enlargement of the current system but to maintain and upgrade the existing system, as could be seen in Table 3. 1. 3. 1. 2 Private sector telecommunications Seven licenses have already been awarded and are listed in Table 5. 1 in Section 5. The responsibility for rural telecommunication services was entrusted to two local private operators, Integrated the Services Bangladesh Limited, with Rural rural Telecommunication Authority (BRTA) and Bangladesh being equally divided between the two operators.

In November 1999, the BTTB signed a contract with the China National Machinery and Equipment Import and Export Corporation (CMEC) valued at US$ 213 million, which gave CMEC the responsibility to upgrade in the 58 telecommunications infrastructure The two Code Division Multiplex Access (CDMA) networks that were launched in 1999 by the Pacific Bangladesh Telecom Limited to cover Dhaka and Chittagong, were totally supplied and supported by Motorola from the United States through their Network Solutions Division. districts in Bangladesh, while 2 months earlier another contract, valued at approximately US$ 58 million, was awarded to the Pakistan Telecom Foundation, in collaboration with the Telephone Industries Pakistan to install an additional 55,000 telephone lines in Bangladesh by the end of 2000. Telecommunications and IT Sector in Bangladesh Page 13 Finally in 2000, breaking the fixed telephone line monopoly position of the BTTB, the Bangladesh concession, Government which will has allow awarded a WorldTel activities of the Bangladesh branch of the GSM World Association can be found on their Web site at: www. gsmworld. com/gsminfo/cou_bd. tm Limited from the United Kingdom to supply a complete telephone system to Dhaka with 300,000 digital lines on a build own operate (BOO) basis. The system, which is expected to be operational in 2003, and designed to be expanded to 500,000 lines, would then compete with BTTB. However, recent reports indicate that WorldTel is finding it difficult to finalise the deal. WorldTel, which operates from London with a branch office in Geneva, is a private sector development company that had been created by the International Telecommunications Union (ITU) in Geneva to develop and finance telecommunications in developing countries on a commercial basis.

WorldTel specific develops systems strategic alliances with Constant problems of interconnection with BTTB, have forced private operators to seek their own transmission network, including using the Bangladesh Railways Fibre Optic network for cellular service. GrameenPhone Limited (GP) after taking out a long lease on the fibre optic cable network that the Bangladesh Railways developed along the entire length of their railway tracks has since been upgraded. This has provided GrameenPhone with a ready made transmission network that covers the whole of Bangladesh and has helped them expand their services along the entire railway route. As a result, GrameenPhone is now expanding its customer base by almost 20,000 a month. Of course, due to lack of adequate interconnection capability of BTTB, most of the new Grameen customers can communicate only with other Grameen customers. uppliers and equipment suppliers to design build and operate their system and could well represent potential business opportunities for European investors in the telecommunications sector. Cellular mobile telephone services were first introduced into Bangladesh by Pacific Bangladesh Telecom Limited (PBTL), a joint venture partnership that is owned by the local conglomerate, the Pacific Group, in 1989 using an Analogue Mobile Phone System (AMPS), though more recently they have changed and are now using Code Division Multiple Access (CDMA) technology. The other three Operators Grameen Phone Limited (GP), TM International (Bangladesh) (TMIB) and Sheba Telecom are providing Cellular service with GSM technology. Private operators offer the mobile, paging and the radio trunking services.

Private operators are also given license to operate digital exchanges at rural Thana headquarters. Details about their The other two cellular operators are also constructing their own microwave links along the Dhaka to Chittagong highway. 3. 2 Information Technology From the field survey it was possible to identify the most important Bangladeshi Computer Companies, those who export and those who are seeking to strike strategic alliances. A few organisations and some individuals have been exporting Software and Data Processing services. Despite their best efforts, the Export Promotion Bureau (EPB) is still unable to procure documented evidence of the actual exports Bangladesh has made. Nonetheless, among the firms/organisations which have

Telecommunications and IT Sector in Bangladesh Page 14 exported IT services are CITech (Computer Information Technology Co); Computer Collaboration in information technology is mostly based on licensing agreements and representation. A growing number of computer training schools are being opened, including one sponsored by Microsoft. 5. EUROPEAN AND OTHER FOREIGN FIRMS PRESENT IN THE TELECOMMUNICATIONS AND There are now about one hundred companies that are members of the Bangladesh Computer Samity (BCS), many of which are headed by young professionals, who after completing their studies in Europe and North America then returned to Bangladesh and created their own companies.

At the present development stage of the IT sector, these professionals are well aware of their shortcomings and are conscious that they require know-how and technology, and so are interested in seeking strategic alliances with European firms. Solutions Limited; ANIRBAN; IBCS-Primax; BRAC; NACD, FBC and Machine-Dialogue. However, the total volume of such export is negligible. According to the recent data available from EPB, computer software and data processing services worth, US$ 15 million were exported during the year 1998-99. INFORMATION TECHNOLOGY SUBSECTORS As indicated earlier, there are already a number of European and other foreign Table 5. 1 Telecommunication Operators in Bangladesh Operator Pacific Bangladesh Telecom Limited Bangladesh Telecom (Pvt. ) Limited Foreign Collaborator/Ve ndor Motorola Area of Operation

Cellular Radio Telephone Service Radio Paging, Radio Trunking and Riverine Telecommuni cation Services Rural Telecom Service Digital Cellular Mobile Radio Telephone Services, and Rural Telecom Service Digital Cellular Mobile Radio Telephone Services Several of the most promising, who are listed in Appendix 3, have been regularly sponsored by both the United Nations and bilateral funds to attend the CeBIT information technology fair in Hanover, Germany, as well as the Softworld fair in Canada. 4. FORMS OF CO-OPERATION Bangladesh Rural Telecom Authority Sheba Telecom Limited Nokia All the seven telecom licencees to date have either foreign private operators as partners or foreign equipment suppliers.

All foreign private operators have entered the market by way of joint ventures, even though in accordance with the GOB private sector investment guidelines, they could have taken 100% equity stake in a telecom operating company. Most foreign investors believe that they need a local partner to help them through the regulatory process with MOPT, while most local groups did not feel they had sufficient technical skills or financial resources to operate on their own. Bangladesh Broadcasting Telephone &Technology (BBTT) TM International (Bangladesh) GrameenPhone Consortium Joint venture between Integrated Services Ltd. and Technology Resources Industries Bhd (Malaysia) A joint venture among Telenor (Norway), Grameen Bank, Marubeni Corporation (Japan) and Gonofone (US) Ericsson; A joint venture between Telecom Malaysia and A. K. Khan Group

Digital Cellular Mobile Radio Telephone Services Personal Hand-phone System (PHS) [Not commissione d yet] Source: Telecommunications in Bangladesh by Fazlur Rahman cited in Table 3. 1 Telecommunications and IT Sector in Bangladesh Page 15 companies present in Bangladesh, as operators, where they work in joint venture with local firms and as suppliers of equipment. Table 5. 1 above lists the telecom licensees, a number of which have foreign partners or foreign vendors. Although there are a number of European investors who may have a significant presence in this sector, a large part of it appears to be dominated by investors from North America. Tyco Submarine Systems Limited of the US underwater fibre optic cable between mport duties were eliminated, it boosted computer imports substantially and led to large retail price reductions. However in the telecommunications sector, import duties and taxes on telecom equipment and phones are still very high at 60%. Figure 6. 1 Projected Private Capital Flow s in the Telecom Sector Bangladesh and Singapore, which would allow Bangladesh access to the global underwater telecommunications cable network that passes through Singapore. This will then give Bangladesh world-wide connectivity into the data superhighway. The underwater fibre optic cable that would cover some 3200 kilometres between Bangladesh and Singapore, is Years: 2000-2010 0 has signed an MOU with the GOB to lay an 20 40 60 US$ Million Inf low

Source: The World Bank Outf low expected to cost about US$150 million and to be completed by the year of 2002. 7. 6. ANALYSIS OF IMPORT AND EXPORT FLOWS The World Bank believes that considerable foreign exchange is earned by Bangladesh on account of the revenue sharing arrangements that BTTB has with international operators. However, the World Bank’s study on FDI in Bangladesh gives the following projections of private capital inflows and outflows in telecommunications investment between 19992000 and 2009-2010, which are given below in

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