Investment Incentive in Bangladesh Submarine Cable Network

Investment Incentive in Bangladesh submarine cable network

Self Introduction

Bangladesh Submarine Cable Company Limited (BSCCL) (http://www.bsccl.com.bd/) having its Principal office at Telejogajog Bhaban 37/E, Eskaton Garden, Dhaka-1000 is the only company dealing with submarine cable business in Bangladesh. It has been incorporated as a Public Limited Company in 2008

It deals in provisioning of telecom infra structure service primarily via submarine cable and domestic high capacity optical fiber networks. Company is wholly responsible for Operation and maintenance of Bangladesh's lone SEA-ME_WE 4 (www.seamewe4.com). It is a submarine cable system installed between Singapore and Marseilles France , having a total of 16 consortium members from 14 countries. Its total length is approximately 18,800KM and it provides basic internet backbone between South East Asia,, India, Middle east and Western Europe. Company is mainly responsible for realizing the concept of "Digital Bangladesh" by the year 2021.

Fig 1 (SEA-ME-WE 4 Network Diagram)

Its main products are IPLC (International Private Leased circuit) in both half and full circuit categories and IP transit. The former product is a point to point physical international connectivity designed for the specific use of Internet Service Providers (ISPs), corporate customers, Banks and educational institutes whereas the later product provides the internet backbone.It's main customers include BTCL, Bangla Tech, Novotel, Mir telecom,Orange telecom and all IGWs, IIGs, ISPs etc.

Bangladesh, An Introduction:

Bangladesh is strategically located in South Asia and borders between 24 00 N, 90 00 E with India in The east , west and north except for a small border in extreme south east with Myanmar (Burma). Bay of Bengal touches the south and south eastern shores of Bangladesh.

It has an area of 143,998 SQ KM1 and is ranked as 94th biggest country2 in terms of area). Bangladesh is the seventh most populous country3 and is among the most densely populated countries in the world with a high poverty rate. Politically, ever since independence in 1971, it has remained a victim of political turmoil including military coupes. However, after restoration of Democracy in 1991, country is enjoying a relative calm and economic progress and has been included in the "Next Eleven"4 economies in 2005.

Key Macro Economics Indicators:

As per table 1, shown below, Bangladesh GDP has enjoyed an average growth of more that 6% since 2006 and the forecast for 2011-12 is even better at 6.5 %.

Table 1

Indicators Actual Revised Projection

2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

GDP growth (percent) 6.4 6.2 5.9 5.5 6.0 6.5

GDP deflator 6.8 8.8 6.4 5.8 5.5 5.0

Average inflation (CPI) 7.2 9.9 7.0 6.5 6.0 6.0

Source: Bangladesh Economic Review, 2009, Ministry of Finance, GoB

Average inflation (CPI) from 9.9 in 2007-8 to 6.5 in 2009-10 and it is predicted that it will further drop to 6.0 for the fiscal year 2011-12. Gross investment (as percentage of GDP) has increased from 23.6% in 2009-10 to 24.3% in 2010-11 and it is estimated that it will increase to 25.2% in 2011-12.

Why Bangladesh

There are a number