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					                            Report On

“Analyzing the Macro Environmental factors to start an ICT investment in
                             Bangladesh”
                                    Executive Summary


ICT and Business Services in Bangladesh is a vibrant sector supported by an enthusiastic culture
and a government committed to providing a pro-business climate for all investors. Investing in
Bangladesh is of compelling interest to high quality companies that are committed to business
growth, reducing manufacturing or R&D costs, and promoting exports. South Asia has in recent
years enjoyed strong economic growth and increased flows of foreign IT investment.


Bangladesh has played a key role in that success, consistently achieving a strong share of that
investment, and is now a significant country of choice for the location of e-Commerce and IT
Services activities. A growing number of national and multinational corporations are investing in
Bangladesh, benefiting from a high quality workforce, a first-class telecoms infrastructure and
the professional coordinated approach of BOI, delivering a flexible and attractive package to
investors.


The Bangladesh government, through its core strategy of business support and the creation of a
dedicated foreign investment agency, is committed to helping businesses become more
competitive by supporting the key drivers of business growth - innovation, investment, trade and
skills. The annual market size for IT including computer hardware, peripherals and software was
estimated to be worth approximately US$ 20 million. The market is fast growing at an annual
rate of about 25%. Information Communication Technology (ICT) encompasses the broad fields
of data/information processing, transmission and communications by means of computer and
telecommunication techniques and these modern tools are being increasingly used for
organizational/personal information processing in all sectors of economy and society.


ICT industry in Bangladesh is relatively new in comparison to other business sectors.
However, the unlimited potential of the ICT sector has commended inquisitive interests from all
concerned. The impact of global hype of the ICT sector is clearly visible in Bangladesh as well.
In the recent years, the local ICT sector has grown enviably. The software segment is relatively
new in the market; however, the segment is showing healthy growth in terms of export earnings.
According to Bangladesh Bank sources, export earnings from Software and ITES was USD
27.01 million in 2005-06, registering a growth of 113 per cent from the previous year. The core
strengths of Bangladesh ICT sector is the people.
An educated, trainable and young workforce working in this sector possesses the required skill
sets to compete in the global scenario. A BCS source revealed that in 2006, the number of IT
professionals in Bangladesh was 25,200, which was 12.50 per cent higher than in 2005. The
majority of this work force excels in pure technical tasks such as programming and networking.
                                  Rationale of the Study

The main plan of this study is to analyze the Macro Environmental factors which are going to
affect the investment for ICT (Information and Communication Technology) in Bangladesh.

As a student of BBA this is very much important for us, because by doing this study we can
know the proper procedure for writing a report and also when we are going to make any further
report in our career, experience of making this report will help us a lot. Experience of making
this report will broaden the student’s knowledge. In business sector we can use our previous
experience to make business report or research.




                                  Objectives of the Study

The main objective of the study is to analyze the Macro level Environmental factors to start a
hypothetical business in Bangladesh.

  i.   The purpose of this report is to provide guidelines on methodological recommendations
       and to propose indicators for ICT (Information and Communication Technology)
       investments.
 ii.   Minimize the Marco Environmental problem and find solution for the successful ICT
       (Information and Communication Technology) investments in Bangladesh.




                                Statement of the Problem

On the eve of the 21st century we are heading towards a world which is entirely dependent on
ICT. Scientifically, everyone knows that the world is sphere, however the world can still be
considered as flat because of the blessings of Information Technology. In the last fifty years or
so, the world has been moving so fast technologically that an enormous demand for IT has
developed globally. In light of the outsourcing phenomenon, Bangladesh should leapfrog into the
ICT Sector. Bangladesh has some competitive advantages over other outsourcing options (China
and India) in terms of its potential population in the ICT sector. Unfortunately in Bangladesh,
there are technology challenges caused by the country’s infrastructure problems. Some of these
problems include poor telecommunication facilities, few software development firms in country
(to help develop local talent and expertise), and lack of e-Governance policies.

It is now a great challenge for Bangladesh to move forward to have a strong ICT workforce. This
is not an impossible task, but the country needs to boost up its infrastructure so that it can
transfer its liabilities into possibilities. Bangladesh can gain the competitive advantage in this
region if we can capitalize on these opportunities as a nation.



                           Scope and Delimitation of the study
This report renders a close analytical look at the ICT industry of Bangladesh with main focus and
emphasis on the Software development and ISP, its growth and development since its initiation.
It also sheds light on the competitors of the ICT industry, its growth prospects and potentials.
The report is written from the point of view of a large investment in ICT sector of Bangladesh,
and step to measure the existing campaign and ways to improve it.
Our research conducted is limited on Dhaka city only. Limited time period and budget do not
permit us to cover all the urban areas of the country. As a result it would not be possible to get
access to all relevant data and information of this study.




                                 Methodology of the Study
For making this report the data has been collected form ICT Ministries web page, Ministry of
Science and Information & Communication Technology Government of the People’s Republic
of Bangladesh, ICT ACT 2005 and The ICT Law.




                         Analysis and Interpretation of the Data
The Macro Environmental factors are: Demographic, Economic, Natural, Technological,
Political and cultural.


Demographic:
Compared to the neighboring India, Pakistan and other South and South East Asian nations,
Bangladesh is lagging behind in IT Sector. But it is true that the sector has vast potentiality to
develop. Availability of substantial number of qualified and experienced young people in various
branches of engineering, science and technologies have opened up the scope of profitable
investment in these sectors. Collaboration in the IT sector is mainly based on licensing
agreements and representation. A growing number of computer training schools and institutes
are being opened. Collaboration in the IT sector is mainly based on licensing agreements and
representation. A growing number of computer training schools and institutes are being opened.
A number of Bangladeshi IT firms are interested in finding international investors or joint
venture partners in various sub-sectors.


Economic :
Impact of global hype of the ICT sector is clearly visible in Bangladesh as well. In the recent
years, the local ICT sector has grown enviably. With over 3,000 local enterprises operating in
hardware, software and ISP segments, the size of Bangladesh ICT industry at present stands at
USD 160 million. The software segment is relatively new in the market; however, the segment is
showing healthy growth in terms of export earnings. According to Bangladesh Bank sources,
export earnings from Software and ITES was USD 27.01 million in 2005-06, registering
A growth of 113 per cent from the previous year. The software companies in Bangladesh mainly
focus on servicing the IT/ITES needs of the local leading sectors like Garments, Banks and
Government. At the same time, leveraging the global nature of the IT business, the local
entrepreneurs are always looking for international opportunities.


Technological :
Bangladesh has joined the consortium of SEA-ME-WE-4 submarine cable, with Internet
bandwidth of 24 GB and 10 GB data transfer capacity per second.



Bandwidth rental Charge (Excluding VAT) in Bangladesh
Bandwidth through Ethernet Port:

Bandwidth (Duplex)                   Rent /moth/Mbps (Duplex)

3-18 Mbps                            Tk 22,000 (US $ 324)

20-45 Mbps                           Tk 24,000 (US $ 353)

50-90 Mbps                           Tk 26,000 (US $ 382)

100 Mbps & above                     Tk 27,000 (US $ 397)



In relation to infrastructural weaknesses, all the stakeholders identified stable electricity as the
top priority. In general, the country lacks adequate electrical supply. The companies operating in
Bangladesh, therefore, must make alternative arrangements to ensure smooth power supply; this
has developed a strong market for alternative power equipment in the form of UPS
(Uninterrupted Power Supply) and IPS (Instant Power Supply). For smaller projects, the cost
addition due to power shortage may not be significant, but for larger projects the cost of a project
may increase for this reason. Infrastructure is weak in Bangladesh. While this is a disadvantage
for doing business, it also means that the area offers large scenario for investment.


Now Bangladesh has a great hardware market but it has not any own hardware product brand.
People are very much interested to know about the computer. But Bangladesh has not enough
IT institute. So here is a great investment opportunity.


Political and Cultural
The Government’s primary objective for development remains poverty alleviation. Government
is focusing on improving the living standard of the rural poor through a set of interventions
which encourage employment-augmenting and income-generating activities, particularly in the
non-farm sector. Our current government has a vision to make a “Digital Bangladesh” in 2021.
So it is a positive side to improve ICT sector in Bangladesh. Also this vision will help to create
more business opportunity here. The BOI is a specialized government agency, reporting directly
to the Prime Minister’s Office, with a clear mission to attract foreign direct investment and
facilitate its entry and establishment in Bangladesh.
                                     Findings of the Study
The followings findings have been found by doing the study. They are, ICT in Bangladesh is a
dynamic sector supported by an enthusiastic culture and a government committed to providing a
pro-business climate for all investors. Highly skilled, cost effective workforce with a strong work
ethic. Ideal geographical location to meet needs of key Eastern markets. Investing in Bangladesh
is of convincing interest to high quality companies that are committed to business growth. There
is a fast growing domestic market and export demand Strong research assistance from the
universities and research institutions are available.


Government is keen in establishing IT related infrastructure for the development of the industry.
The favorable government policy for the ICT industry is attracting these investors towards this
sector. In relation to infrastructural weaknesses, the country lacks adequate electrical supply.
Regarding specific competencies, Bangladesh at present is more suited for less complex projects
such as web content development, mobile content development, back office software
development, 2D/3D animation, desktop publications and call centers. The telecom boost in the
country presents another opportunity for the IT companies as support service to the telecom
companies.


The major focus of the telecom opportunities lie in the form of mobile content development and
value added service solutions. At individual company level, the business vision (or lack of it) of
the local IT entrepreneurs is the biggest threat. Bangladeshi’s are used to short term profit from
investing in the textile business. Many of the investors from this sector are also expecting short-
term profit in the IT business.


The management style in Bangladesh is largely based on a top-down approach. At individual
company level, the business vision (or lack of it) of the local IT entrepreneurs is the biggest
threat. Bangladeshi’s are used to short term profit from investing in the textile business. The
existing supply of Internet access is somewhat constrained. The costs of Internet access are
relatively high, and even at high costs no optimal connection is yet available.
                                            Suggestions
Demographically Bangladesh is in a good position. So it has a bright future in ICT sector. The
neighbor country India is already known as an ICT developed country in ASIA. Bangladesh
should optimize this resource.


ICT sector has an importance in Bangladesh economy. This sector can do more Contribution in
our economy. For that the bankers of Bangladesh should introduce loan facility for the invertors
of ICT industry. It will help to encourage invest in this sector. Also government should reduce
import tax for ITC product.


Technologically Bangladesh is not developed so much. So it is very much important to develop
in technologically. For that government have to take many step that will help to improve this
sector. Bangladesh has joined the submarine cable, but now it’s the time to connect with an extra
submarine cable. Because it has no other high speed internet backup system. This is very much
important for increasing investment here.


It is true that people of rural area do thing that the computer and internet can be a part of
communication and knowledge. So at first government and investor have to take measurable step
To raise their knowledge about ICT.


    Invest at least 5% of our yearly defense budget on IT related R&D, take example from
       Israel, India, Pakistan, today’s war is Network Centric
    Make compulsory IT training for all Government Officials and defense officials.
    Make compulsory IT education for all Graduate Level Courses
    Promote IT-Enabled Services like Medical Transcription, Call Center, and Data Entry,
       which requires only 3-6 months training.
    Target to produce ICT related graduates about 25000/yr, now Bangladesh producing
       5000/yr from Public/Private Universities
    Invite at least one big company like Microsoft, Motorola, and IBM to open a
       development center in Bangladesh that should be our target.
    All Government Organization (Ministries/Offices) with whom Citizen needs to interact
       must have websites.
    All Private/Public Universities must have websites and their Final Year CS students
       could develop these web sites as their projects.
    Emphasis should be given to open source technology with highest priority.
    We shouldn’t focus on giving away 10,000-25,000 computer’s to schools rather we
       should make 25,000 computer literate teachers for schools & colleges.
    The government also dreams of changing the country through IT, although not farsighted
       enough to make investment in IT Education.




                                           Conclusion


Bangladesh has a very bright future for ITC. Although there are some constrains on this sector
but it can overcome. The current government has a promise to make a DIGITAL
BANGLADSEH; as a result the government is now more conscious about this sector. The young
generation has also a great interest to work on ICT sector. There is opportunity to grab the
international market


The government should decrease the tax on ICT equipment to develop this sector. There is a fast
growing domestic market and export demand Strong research assistance from the universities
and research institutions are available. Government is keen in establishing IT related
infrastructure for the development of the industry. Many of the investors from this sector are also
expecting short-term profit in the IT business. The management style in Bangladesh is largely
based on a top-down approach. The favorable government policy for the ICT industry is
attracting these investors towards this sector.
                                      Bibliography


   ICT & Business Services Overview
   BUSINESS OPPORTUNITIES WITHIN THE IT AND TELECOMMUNICATION INDUSTRY
    BANGLADESH
   ICT Investments in Enterprises - Nordic Guidelines
   AN INVESTMENT GUIDE TO BANGLADESH - International Chamber of Commerce
    The world business organization

				
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