business opportunities within it & telecommunication industry (bangladesh)

7/31/2019 Business Opportunities Within IT & Telecommunication Industry (Bangladesh)

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BUSINESS OPPOrTUNITIESWITHIN

THE IT ANDTELECOMMUNICATION INDUSTrY

BANgLADESH


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Danida

Business Opportunity Study

within the IT and

Tele

communicat

ion Industryin Bangladesh

A sector study prepared forDanida

by Hndvrksrdet(The Danish Federation of

Small and Medium-Sized Enterprises)

in collaboration with

Muhammad Hasibul Hasan,

Bangladesh

November2006


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Ministry ofForeign Affairs of Denmark

Danida

November2006

Publisher

Ministry ofForeign Affairs of Denmark

Asiatisk Plads 2

DK-1448 Copenhagen K

Phone: +45 33 92 00 00

B2B service line: +45 33 92 00 55

Internet: ww w.b2bprogramme.com

ww w .b 2 b p ro g r a m .d k

Production

The Danish Federation ofSmall and Medium-Sized Enterprises

(DFSME) Islands Brygge 26

DK-2300 Copenhagen S

Phone: +45 33 93 20 00

Internet:

ww w . h v r .d k and

Muhammad Hasibul Hasan

Apt. # C5, H # 8, R # 13Dhanmondi Residential Area

Dhaka 1209, Bangladesh

Phone: +880 2 8120872

Cell phone : +880 189 286926

Design

Designgrafik.dk

CoverphotoKristian Granquist

The report can be downloaded from:

ww w .b 2 b p ro g r a m m e .c o m

ISBN 978-87-7667-764-0 (Internet

version) ISBN 978-87-7667-765-7 (print

version)
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Executive Summary

ICT industry in Bangladesh

Industry profile

ICT industry in Bangladesh is relatively new in comparison to otherbusiness sectors.However, the unlimited potential of the ICT sectorhas commended inquisitive interestsfrom all concerned. Theimpact ofglobal hype of the ICT sectoris clearly visible inBangladesh as well. In the recent years, the local ICT sectorhas grown enviably.

With over3,000 local enterprises operating in hardware, software and ISP segments, thesize ofBangladesh ICT industry at present stands at USD 160 million. With the advan-tage ofearlierinitiation, the hardware segment dominates the market share (65 per cent)while the relatively late entrant, softwaresegments command about 15 per cent of thetotal market. The ITES segment (15 per cent) and Internet and NetworkServices (5

per- cent) make up the remainingpart of the market.

The software segment is relatively new in the market; however, the segment is showinghealthy growth interms of export earnings. According to Bangladesh Bank sources,export earnings from Software and ITES was USD 27.01 million in 2005-06, registeringa growth of 113 per cent from theprevious year. Thesoftware companies in Bangladeshmainly 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 ITbusi-ness, the local entrepreneurs are always looking for international opportunities. Thanksto these efforts, Bangladesh now has become one of the most potential outsourcing desti-nations in the world.

The core strengths ofBangladesh ICT sector is the people. An educated, trainable andyoung workforce working in this sector possesses the required skill sets to compete in theglobal scenario. A BCS sourcerevealed that in 2006, the number of ITprofessionals inBangladesh was 25,200, which was 12.50 per cent higherthan in 2005. The majority ofthis work force excels in pure technical tasks such as programming and networking. Infact, a survey conducted by BASIS on 1,100 employees of 55 IT companies revealed that,respectively, 42 and 14 per cent of the respondents were engaged inprogramming and net-workingjobs. However, the same survey states that, much to the delight of the industry

experts, the number ofnon-codepersonnel in the IT companies is rising at fastpace.

The success of the IT industry hasprompted many relevant associations to evolve to pro-vide focalpoints forentrepreneurs and foreign investors. The government ofBangladeshhas declared the ICT sectorasthrust sector. The creation of a separate Ministry for ICT(Ministry ofScience and Information and Technology), formulating favorable laws andinitiating government ITprojects are encouraging steps forthelocal/international inves-tors in the Bangladesh ICT industry. In addition to thepolicy development, the govern-ment is keeping close interactions with various industry associations. BASIS, BCS, BCCand ISPAB are some of the apex bodies working for the improvement of the ICT indus-try in Bangladesh.

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ExecutiveSummary

Labour force

Bangladesh enjoys a clear competitive advantage in its IT labourforce. The leading uni-versities in the countryprovide world class IT courses. Each year, various institutions

produce about 2,000 IT graduates. In addition to that, a huge number of non-IT gradu-ates are working in the sectoras well.

The most significant advantage of the Bangladeshi workforce is the low wage rates. Thesalaries forITprofessionals could be as low as USD 75/month. On the other hand, thehighersalary ranges at approximately USD 1,000-1,200/month. The quality of the grad-uates coming out ofvarious institutionsis satisfactory. Bangladeshi students have provedtheirpotentials in the international competitionsby winning a number ofprogrammingcontests.

However, the available workforce is still not adequate to meet the industry demand.According to Mr. Fahim MashroorChowdhury, CEO, Bdjobs.com (BASIS director aswell), each yearthe industry faces a shortage of about 1,800 to 2,600professionals. Heidentified the braindrain and a perceivedlackofcareerprospectsas the two majorrea-sons forthis short fall. Along with other industry experts, he suggested improving theindustry-academia collaboration to produce the right people for the rightjobs.

Infrastructure

Bangladesh hasbeen building its infrastructure support for the IT industry overtheyears. This year, the country ensured global connectivityby connecting to theInformation SuperHighway through SEA-MEA-WE 4 consortium. High-speed Internetconnectivity through fiberoptics cables costs about USD 2.67/per month for 1 kbpsconnection. The existing VSATbackbone will continue to remain the major Internetinfrastructure until the new Backbone (Submarine Cable Connectivity) operates100 per cent. There are as many as 150 ISPs in the country and the competition amongInternet serviceproviders has resulted in significant improvement in theirservices. Mostof the ISPs are now providing 24/7 on-site technical support.

In relation to infrastructural weaknesses, all the stakeholders identified stable electricityas the top priority. In general, the country lacks adequate electrical supply. The compa-nies operating in Bangladesh, therefore, must make alternative arrangements to ensuresmooth power supply, This has developed a strong market foralternative powerequip-

ment in the form of UPS (Uninterrupted Power Supply) and IPS (Instant Power Supply).Forsmaller projects, the cost addition due topower shortage may not be significant,butforlarger projects the cost of aproject may increase forthis reason.

Hardware and technical back-up

According to researchby Springboard Singapore, the volume of the hardware market inBangladesh is USD 129.4 million at present. Locally assembled and often unbrandedmachines dominate the pc/server market. However, most of the international giants(HP, IBM, and Dell etc.) are present in the market through theirlocal agents.

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ExecutiveSummary

The cost of a PC orserverin Bangladesh is in line with world marketprices. Abrandedserverwith basicconfiguration costs about USD 6000 whereas the unbrandedversion

costs about USD 2,000. Theaverage workstation price is USD 700-900 for a brand PCand USD 500-600 for a clone PC.

After sales support of the hardware is satisfactory. Most large organisations usually go forAMCs (Annual Maintenance Contract) with the vendors. The AMC is customizable inaccordance to the clients need. However, the local vendors are of the opinion that aninternational warranty is not always suitable forclients of brand equipment. Theirlogic isthat the designated vendors (local agents) would always keeptheirdirect customers ontheir priority lists. Additionally, the international warranty does often not make themdirectly obligated toprovide local support.

Industry competencies

As stated in earliersection, cheap labouris thebiggest competency for the BangladeshICT industry. The skilled labourforce is easily trainable and quicklearners. They alsoshow greatercommitment tospecific areas ofconcentrationprovided the employerscarefullybuild the loyalty.

The industry experts opined that the geographical location of the country is suited toreach out to othermarkets in Asia. Additionally, India is moving to a higher strata of theglobal IT market, which hascreated an opportunity forBangladesh to capture the lower

niches (left by India) of the market.

Bangladesh does have willing investors with comprehensive local business knowledge. Theinvestors in othersectors (textile, garments etc.) have proven theircompetencies ininternationalbusiness. They are good at spotting newbusiness opportunities and imple-ment them efficiently. The favorable governmentpolicy for the ICT industry is attractingthese investors towards this sector. With theiraccomplishments in internationalbusi-nesses, they couldbecome the ideal strategic partners for international companiesintend-ing to venture into Bangladesh ICT industry.

Regarding specific competencies, Bangladesh at present is more suited forless complex

projects such asweb content development, mobile content development, back office soft-ware development, 2D/3D animation, desktop publications and call centers. Bangladesh,however, possessespotential to move up the ladderfor more complicated projects (ERP,CRM, ASP etc.) in the close future.

Local market opportunities

In recent times, Bangladesh has become one of the prominent outsourcing destinations inthe world. Danishcompanies could easily venture into this readily available opportunity.

The telecom boost in the countrypresents another opportunity for the IT companies assupport service to the telecom companies. The majorfocus of the telecom opportunitieslie in the form of mobile content development and value added service solutions. Thegovernment is yet another big opportunity that isworthpursuing. To act on its declara-tion of ICT as thrustsector, the government is seriously taking initiatives towardspublic


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ExecutiveSummary

ITprojects. The focus ofthese projects is in the form ofe-governance and office automa-tion.

The SME sector in Bangladesh has the potential tobecome a lucrative market niche forthe Danishcompanies. According to a survey report (by BASIS-KATALYST), the latentIT/ITES demand of the specific SME segments is about USD 17.94 million. The reportalso suggested that demand is gradually growing along with the increase in the awarenesslevel of the SME entrepreneurs.

The opportunities exist without any doubt. Moreover,Nordic companies are making useof these opportunities already. The successful companies in Bangladesh identifiedpre-

planning and market-analysis as two of the majorsuccess factors for new companiesentering the Bangladeshi IT industry.

Market threats

The Bangladeshi IT industry has many of the right ingredients forsuccess, however,according to the industry stakeholders, some existing/perceivedthreats for the industryremain.

At individual company level, thebusiness vision (orlackof it) of the local IT entrepre-neurs is thebiggest threat. Groups ofcompanies have many times started in IT as achance venture. This naturally, in most cases, did not succeed. On the other hand, the

lackoffinance for the real IT entrepreneurs has limited them from reaching their truepotential.

The countrys ITpolicy is favorable, yet, Bangladesh faces a big threat ofresourcecrunch in the near future. Brain drain and attractiveness of otherbusiness sectors arereducing the numberofprofessionalspursuing an IT career.

Bangladeshis are used to short term profit from investing in the textile business. Many ofthe investors from this sector are also expecting short-term profit in the IT business.

The management style in Bangladesh is largelybased on a top-down approach. Apart

from clashingdirectly with the Danish/Scandinavian style i.e. each person is responsibleforits own job it also means that Bangladesh is short of middle management skills.

In Bangladesh, theprocess oflegally establishing a company takes a long time. It cantake up to sixmonths to obtain the necessary licenses, approvals etc.

The existing supply of Internet access is somewhat constrained. The costs of Internetaccess are relatively high, and even at high costs no optimal connection is yetavailable.

China, Vietnam and similar countries pose a future threat to the Bangladeshi IT indus-

try. The industryprospect/potential for those countries is very similar to Bangladesh. Inaddition, they enjoy more stablepolitical situation. The even field in the lowerstrata ofIT industry createdby the fact that India moving to higher strata provides equalchance for all potential countries like Bangladesh, China, Vietnam etc.


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ExecutiveSummary

SWOT

The specific success factors that Danish companies could leverage when entering theBangladesh ICT industry are:

Business Vision (taking IT as core business) Management Practices (proven effective managementpractices andbusiness

acumen) Business linkages (links withprospective clients in Nordic/EU regions) Regional knowledge (knowledge of thebusiness practices of the regions from

where many outsourcing projectsplaced) Danish Governmentspresence (support forrelationships between Danish

and Bangladeshi companies)

The Danish companies, however, need to improve on some aspects if they are to succeedin Bangladesh. The foremost success factor is to improve local knowledge. Similarly, theHR management needs to be customized to suit the local culture. Overall, the commu-nicationbarriers are to be addressedproperly.

Entering Bangladesh would help Danish companies in expanding their market andwould help them enter new markets. In the long run, Danish companies could ventureinto the potential Asian markets and they could capture the SME market niche inBangladesh and in otherregions. However, the road to successpresents some challengesforDanish IT companies. The lackofmethodical approach ofBangladesh ITcompanies(and ITprofessionals) and theirlackof information couldbecome majorhurdles inbusi-ness planning. On the operational aspect, the training requirement and communication

barrier has to be addressed properly to achieve the desired outcome.

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Table ofContents

Executive Summary 3

1 Introduction to Bangladeshi ICT industry 111.1 Number of enterprises 111.2 Size ofenterprises (industry volume) 121.3 Proportion ofGNI 131.4 Export of ICT services 131.5 Key areas of operation 141.6 Investment scenario 151.7 ICT industry employment scenario 151.8 Related associations/governingbodies 161.9 Tax rules and otherpolicies 201.10 Working hours etc. 211.11 Political risks with the industry 21

2 Labour force 222.1 ICT education in Bangladesh 222.2 ITprofessionals skill matrix 222.3 Availability ofskilled labour 232.4 Labourcost 242.5 Universities and training institutions 24

3 Infrastructure 27

3.1 Internet bandwidth availability 273.2 Bandwidth cost 273.3 Electricity andpowerstability 29

4 Hardware and technical back-up 304.1 Overall hardware market 304.2 Servers/workstation availability 304.3 Servers/workstation price 304.4 Availability oftechnical support 314.5 Major hardware companies presence 31

5 Key competencies in Bangladeshs ICT sector 325.1 Key industry competencies 325.2 Software application competencies 33

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6 Local market opportunities and threats 356.1 Specific market segments 356.2 Micro level 366.3 Macro level 366.4 International 37

7 SWOT 38

Appendices 41

List ofabbreviations 41Reference web sites 42Case study 43Interviewed companies 46Outline of the CSE course curriculum 51Acknowledgments 51

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1 Introduction to Bangladeshi ICT industry

During the late 90s, Bangladesh has seen an increasing growth of the ICT industry.Initially, the favorable taxpolicy of the government ofBangladesh in 1998 accompanied

by the global affordability ofpersonalcomputers have had tremendous impact on theusage of computer. The favorable import taxpolicy oncomputers and computeraccesso-ries during that time was one of the timely steps taken by the government ofBangladesh.From then on, in accordance with the global trends,bothprivate and public sectors inBangladesh caught up with effective utilization of information technology. The forma-tion of a substantial number ofsoftware development companies is a good indication ofthis development. Recently, wide spread telecommunication (especially the cellulartelephony) outreach all overthe country has given the ICT industry in the country anadded impetus to move forward.

1.1 Number ofenterprises

A report by Bangladesh ComputerSamity (BCS) provides an overview of the composi-tion ofICTenterprises in Bangladesh. However, the report is focused on software, hard-ware, Internet services and training and othersegments and the statistics of the telecom-munication enterprises are not included in that report.

Fig. 1:Number ofICT enterprises in Bangladesh

)BSEX BSF

4 P G U X BSF

*41

5SB J O J O HBOE PUIFST

(Source:BCS)

As seen from the figure, the hardware segment dominates the industry with 2500 enter-prises in 2006. In accordance with the growth in hardware demand, this segment hasshown a steady growth ofabout 11 per cent peryearfrom 2000 to 2006. The software

segment grew at good rates in earlier yearsbut hasslowed down relatively in the recentyears. At present, there are about 350 software development firms inBangladesh. TheInternet Service Provider (ISP) segment is in tune with the growth ofsoftware segment.

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1 Introduction

The recent introduction ofadvanced technological backbone in the ISP shows a decentgrowth of the ISP segments (presently 150 ISPs are operating in the country). Thereare150 training institutes and auxiliary ICT support companies in the country.

The telecommunication segment is sometimes treated separately in the country, but theimpact and the huge volume of the telecom segment is quite significant in the totalindustryperformance. According BTRC1, the number of mobile phone users hasreached15.5 million in August 2006. According to ITU2 data, currently, Bangladesh has around1,000,000 fixed telephone lines installed by the BTTB3, Sheba Telecom and BangladeshRural Telecom Authority (BRTA). The present tele-density in Bangladesh is approxi-mately 0.5 per cent.

1.2 Size ofenterprises (industry volume)

A report4 included in the Software Product Catalogue (2006)publishedby theBangladesh Association ofSoftware and Information Services (BASIS) states that the totalICT market size in Bangladesh is USD 160 million. The approximateproportion of theICT industry among different segments is as follows.

Table 1: Domestic ICT market in Bangladesh

Market segment Volume (million USD) Proportion (per cent)

Computer and networkhardware 105 65%

Software 24 15%OtherITES5 24 15%

Internet and network services 8 5%

(Source: BASIS)

Fig. 2: Bangladesh domestic ICT market (major) segments

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4 P G U X BSF

0UIFS *5&4

* O U F S O F UBOE OFUXPSLTFSWJDFT

1) BTRC:BangladeshTelecomRegulatory Commission

2) ITU:InternationalTelecommunication Union (ITU)

3) BTTB:BangladeshTelephone & TelegraphBoard

4) BangladeshSoftwareIndustry and itsdynamics

5) ITES: ITEnabledServices


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1 Introduction

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1 Introduction

1.3 Proportion of GNI

Asper Word Bank source, the GNI indicators forBangladesh are as follows:6

GNI (million USD) 66,646

GNIper capita 141.8

The available data for the sectorspecific GNI were not available. However, taking thetotal ICT industry size as USD 160 million (source: BASIS), the approximate GNI fromICT sectorcomes to 0.002 per cent of the total GNI. The export earning from softwareforyear2005-06 is very nominal 0.0004 per cent of the total GNI.

1.4 Export ofICT services

According to the Bangladesh Bank source, export earnings from Software and ITES wasUSD 27.01 million in the fiscal year2005-06 registering a high growth of 113 per centfrom theprevious year (2004-05). The following chart shows the Bangladesh softwareand ITES export earning forlast five years.

Table 2: Export earning ofBangladeshi software in recent 4 years

Figures in million USD

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

Software export 2.24 2.80 4.20 7.20 12.68 27.01

Yearlygrowth - 25% 51% 51% 76% 113%

(Source: Bangladesh Bank)

Fig. 3: Software export from Bangladesh

4 P G U X BSF F Y Q PSU QFSGPSNBODF :F B S M Z F Y Q PSUHSPXUI

6) Source:ht tp:/ /www.doingbusines s.org (WordBank -Doing_Business_ 2007_Country_pages.pdf)
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1 Introduction

According to industry experts (BASIS leaders), the recent development in joint venturesand businesscollaborations among Danish companies and Bangladeshi software compa-

nies would assist significantly in sustaining the enviable growth in the export earning.Some ofthese projects are already inplace and many others are either in thepipeline orperceived to be coming in the near future. Another factorthat has contributed to therecent high export growth is the influence of the multinational telecom companies.These companies while operating in Bangladesh utilized the local IT sector for many oftheir internationalprojects giving a good software export opportunity forBangladesh. At

present, there are about fifty companies in the country engaged in exporting softwareand ITES to thirty countries across the globe. The export destinations are USA, Canada,EU countries, Middle East, Japan, Australia, South Africa and some South East Asiancountries.7

1.5 Key areas ofoperation

BASIS carried out a survey among the 152participating companies in SOFTEXPO8

2005 to find out some key industry trends9. One of the findings ofthis survey provides agood insightinto the client/industry focus of the software companies operating in theBangladeshi market. Thefollowing section reproduces the findings of the BASIS surveyofoperational domains of the softwarecompanies.

Fig. 4: Industry focus ofBangladesh ICT (software segment) industry

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1 I B S N B D F V U J D B M

(PWF S N F O U

'JOBODJBMTFDUPS

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JOEVTUSZ

5F M F D P N N V O J D B U J P O

) P T Q J U B M J U Z

& E V D B U J P O

% F G F O D F T FSW J D F T

0UIFS

The industry analysts find the survey results positive because of the fact that a significantproportion of the software companies (57 per cent) are focusing on the government sec-tor. The obvious implication is that the public ICTprojects are increasing in numbers

7) According to BASISsurvey (2005) [152 BASIS members andnon memberscompanieswere surveyed]

8) Yearly software & ITESexposition organisedbyBASIS


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9) Thissection explainsone of the trends andothersections(Lab our force) explainsthe otherfindings

of the survey

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1 Introduction

and attracting businesspeople towards them. The focus of the government spending onIT is targeted towards e-governance and office automation. The public sectoris the larg-

est domestic segment forsoftware (IT) companies in Bangladesh. Greateraccess to thissectorhas definitely provided added impetus for the local ICT industry.

Among othersectors, the textile and garment and thepharmaceutical industry stand out(both at 60 per cent). The textile and garment industry is the largest export sector inBangladesh. The international exposure and competition of the sectorhaveprompted thegarment manufacturers to streamline theirproductivity. The most effective and readilyavailable option was the introduction ofprocess control through automation. As a result,many export oriented garment companies opted for phase-by-phase automation andthus created opportunities for the local IT companies. Similar scenarios exist in the

pharmaceutical industry. However, contrary to garment and textile industry, the

pharmaceutical industry focuses on fulfilling the needs of the domestic market.

Another key operational area for the IT companies is the financial sector. In recent years,thebanks are going online creating a huge demand forsoftware and networksolutions.However, so far, foreign software dominates the banking sector.

The hardware/servermarket segment in Bangladesh is doing relatively good in its opera-tions. A recent Springboard10 research reported that Bangladeshi PC/servermarket gen-erated growth of 23.8 per cent in Q1 2006 (Jan-Mar), compared to the first quarter ofthepreceding year.

From abuyer perspective, large enterprises are currently the dominant segment of themarket, contributing around 23.0 per cent of the total PC/Server shipments11. The largecorporations particularly in banking and telecom are the key customers driving mar-ket growth. The government segment showed strong growth of 30.7 per cent annuallymainly due to the increased automation activities oflocal and nationalbodies. The SMEmarket represents a significantportion ofshipments (33.9 per cent) in Bangladesh butreceives limited focus from IT vendors due to the substantial opportunities in the govern-ment and large enterprise sectors.

1.6 Investment scenario

The lionsshare of the ICT market in Bangladesh is dominated by the internationalgiants like Microsoft, Oracle, Sun etc. The off the shelf (packaged/license) software wereintroduced in the local market in the mid 90s. As a result, they enjoy a market domi-nance compared to the indigenous customized software segment. In addition, the multi-national companies working in Bangladeshbrought in their global software. Though,recently they havebeen working with local companies inprocuring their ICT require-ments. One otheraspect of the investment scenario is thepresence of international soft-ware vendors through local agents. Microsoft in this regard leads the way.

10) A Singapore basedmarketresearchcompany (ht tp:/ /ww w.springboardresearch.com)

11) TheshipmentreferstoNo. ofPC/Serv er coming toBangladesh.
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1 Introduction

Fig. 5: No. ofITprofessionals in various years

/P P G QSP G F T T J P O B M T

(Source:BCS)

According to BASIS, more than 300 local software companies employ about 5,500 soft-wareprofessionals. In 2005 (during SOFTEXPO 2005), BASIS carried out a survey on1,100 employees working in 55 companies. This section discusses the general findingsfrom that survey. Section 2.0 (Labour force) includes otherfindings (skill matrix, educa-tional level etc.) of the samesurvey.

Table 4: Technical job distribution in software companies

Job type No. ofrespondents Per cent of total respondents

Networkengineer 7,700 14%

Programmer 23,100 42%

System architect 3,850 7%

System analyst 4,400 8%

Testing/QA 4,400 8%

Project manager 3,850 7%

Graphic designer 3,300 6%

Webdevelope

r4,400 8

%

(Source:BASISsurvey. Number of professionals surveyed : 55,000)

Industry experts are of the opinion that the significantproportion of thejobs in the non-codingsegments(Project Management, System Analysis etc.) is an encouraging sign.They contribute to the commitment and seriousness of the local software companies.Keeping in mind the everused 80-20 rule for management and technical workin soft-ware projects, the experts believe that with the increase in largerprojects, the non-codeprofessionals in IT companies could establish theirprominence more effectively and effi-ciently.

The fact that non-technicalpeople are more and more required in the IT industry, haveencouraged many of the new graduates from the universities to choose a careerin ITcompanies in areas of businessdevelopment and customer services. However, the curricu-lum in the universities forbusiness graduates do not include any specialization in busi-


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1 Introduction

ness and IT (IT Marketing, IT Sales etc.). Consequently, there is a gapbetween the aca-demics and the people from the IT industry. However, trade associations with the help of

various industry developmentpartners are in theprocess ofbridging the gapbetween therequirements from the industry and the output of a skilled workforce. In this process, the

biggest hurdle for the universities is the lackofimpetus for the new students to decide onthe IT all along. In most cases, other industry segments absorb the businessgraduates fortheirdifferent operations. Moreover, as business and IT is still a relatively new field, topclassbusiness graduates are reluctant to engage themselves in the IT industry.

1.8 Related associations/governingbodies

Ministry ofScience and Information and Communication Technology (MOICT)

(http://www.mosict.gov.bd)

The former government established the MOICT. The reasonbehind this establishmentwas to harness the potential of the IT industry and to channel government support forthe growth of the industry. Headed by a Minister, MOICT works as the hub to spreadIT around the country. The Ministry has set up an ICT incubator and is in the planning

process ofcreating a Hi-Tech Park in order to promote ICT related investments in theprivate sector (from home and abroad).

Export PromotionBureau (EPB) (ht tp://www.epb.gov.bd/i ndex.ht ml)

The EPB is a National Export Promotion Agency under the Ministry ofCommerce. Theorganisation isreorganizedby the promulgation of a Presidential Ordinance in 1977 as asemi autonomousbody. The goal of the organisation is to promote export trade andimproveplan andpolicies helpful to theprivate sector. IT is administered by a Board ofManagement (BOM) comprising members from both public and private sectors, thehonorable Minister forCommerce is the ex-officio Chairman and the Vice-Chairman isthe chief executive of the Export Promotion Bureau.

Bangladesh Computer Council (BCC)(ht tp://www.bccbd.org)

The main objective ofestablishing BCC was to ensure the effective application andexpansion in the useofinformation technology. In view ofthis, BCC hasbeen formulat-ing appropriate policies and implementing them since its inception. BCC works in threemajorservice areas:I. Advisory ServicesII. IT- Based Training CoursesIII. Initiation and implementation ofDevelopment Projects

ICT Business PromotionCouncil (IBPC)

Public andprivate sectorrepresentatives related to the ICT sectorhave formed an ICTBusiness Promotion Council. The Council is responsible for promoting ICT related serv-ice andbusinesses in foreign as wellaslocal markets. IBPC has already established ashared office in Silicon Valley in California, USA, forBangladeshi ICT companies inter-
http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.epb.gov.bd/index.htmlhttp://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.bccbd.org/http://www.mosict.gov.bd/http://www.mosict.gov.bd/http://www.epb.gov.bd/index.htmlhttp://www.bccbd.org/


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ested in doingbusiness in the US. Very soon, offices in Europe and othercities in the USwillbe established.

Board ofInvestment (BOI)(ht tp://www.boi.gov.bd)

The Board ofInvestment (BOI) was establishedby the Investment Board Act of 1989 topromote and facilitate investment in theprivate sector both from domestic and overseassources with a view to contribute to the socio-economic development ofBangladesh. It isheaded by the Prime Minister and is a part of the Prime MinistersOffice. Its member-ship includes representatives (at the highest level) of the relevant ministries industry,finance,planning, textiles, et.al. as well as others, such as the GovernorofBangladeshBankand heads ofsome business associations. The executive Chairman is the

Operational Head and CEO ofBOI.

Bangladesh Association ofSoftware and Information Services (BASIS)(http://www.basis.org.bd)

Bangladesh Association ofSoftware and Information Services (BASIS) is the nationalassociation forsoftware and IT related services companies ofBangladesh. Formed in1997, the association hasbeen working with a vision ofdeveloping a vibrant local soft-ware and IT service industry in the country. In light ofthis vision, BASIS hasbeenworking hard to create IT awareness in the society through underlining the high impor-

tance ofmaking the country more IT capable for a better future of the nation. At thesame time, the association hasbeen working hard forcreating an enabling environmentfor the software and ITES industry of the country so that it can flourishby rightly utiliz-ing the huge market potential both at home and abroad.

A nine (9) memberBoard ofDirectors (electedby direct votingby the members for atwo-yearterm)runsBASIS. The Board ofDirectors has the overall responsibility forrunning the affairs ofBASIS and setting policy guidelines forits secretariat. Aside fromthe electedboard ofdirectors, different sub-committees comprising ofmembers dealwith different policy and development issues. BASIS has a strong secretariat headedbythe secretary. The secretariat is well staffed to deliver various memberservices and to

carry outprograms and activities in the different areas as specified within the broad goalsoftheassociation.

Bangladesh Computer Samity (BCS) (ht tp://www.bcs-bd.org)

Bangladesh ComputerSamity is the national association of the ICT companies (mostlyfocusing on the hardware segment) in Bangladesh. BCS was established in 1987 witheleven members.

The ICT industries ofBangladesh comprises distributors, dealers, resellers ofcomputers

and alliedproducts, locally assembled computervendors, software developers and export-ers, Internet serviceproviders, ICT based educational institutions and training houses,ICT embedded services providers etc.
http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.boi.gov.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.bcs-bd.org/http://www.boi.gov.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.bcs-bd.org/


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The total number ofmembers comprises 524 at present. The body is run by a 7-numberexecutive council elected every two years.

Internet Service Providers Association ofBangladesh (ISPAB)(http://www.ispabd.org)

The Internet Service Providers Association ofBangladesh was established in 1998. Thegeneral purpose ofISPAB is to improve business conditions of the Internet servicepro-viders operating in Bangladesh. Itserves the commonbusiness interest ofits members.Theirworking areas include

- Promoting higherbusiness standards

- Disseminating information- Ensuringbenefit formembers (and theircustomers)- Influencing the government forpragmaticpolicies- Performing functions that are customary among trade associations- Cyber Caf OwnersAssociation ofBangladesh (CCOAB)

( h t t p : //ww w .cc o a b - b d .o rg)

CCOAB is the trade association of the cyber caf businesses at the national level.Established in 2003, the association safeguards the rights and interests of the membersand helps the ICT in Bangladesh through combined strengths of the members.

1.9 Tax rules and otherpolicies13

The government declared the ICT sectoras a ThrustSector ANational ICT Task Force hasbeen formed which is headed by the Honorable

Prime Minister. Thetask force made 45 suggestions forimprovements; 25 havebeenimplemented by the government and further 9 are in theprocess of being imple-mented

A pragmatic National ICT Policy hasbeen adopted (2002) The Copy-write law is enacted The draft of the ICT Act hasbeen approvedby the Cabinet (it awaits the final

approval from thepolicy makers) The government have allocated minimum 2 per cent of ADP (Annual Development

Program) in IT spending (more than USD 53 million peryear) The software business in Bangladesh enjoys full Income Tax Exemption ICT and ITESproducts/services enjoy Value Added Tax (VAT) Exemption Generally a 5-7 yeartax holiday is provided to foreign direct investors and full

repatriation ofinvested capital,profit and dividend is available The government has exempted customs duties and VAT on computers, hardware and

accessories Now, Bangladesh is connected to the Information SuperHighway (submarine cable

connectivity) through SEA-MEA-WE 4 consortium. The present VSAT backbone

would soonbe replacedby high speed fiber optic connectionbackbone

13) Sources:Board o fInvestment(ht tp:/ /ww w.boi .gov.bd/invest_incentive.php);BASIS( ww w.basis.org.bd);

National Board of Revenue (ht tp:/ /ww w.nbr-bd.org);ht tp:/ /www.itforchange.net/WSIS/ dhaka .More on

ICTpolicy andgovernment initiatives isavailable atht tp:/ /www.itforchange.net/WSIS/d haka/
http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ispabd.org/http://www.ccoab-bd.org/http://www.ccoab-bd.org/http://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.boi.gov.bd/invest_incentive.phphttp://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.basis.org.bd/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.nbr-bd.org/http://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://www.itforchange.net/WSIS/dhakahttp://w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The fixed and cellulartelephone connections have shown significant growth in thelast few years

An ICT incubatoris established and an ICT parkis in the pipeline Computerscience as a course hasbeen introduced at the High School level The Ministry ofScience and ICT has introduced an ICT Internship Program in

cooperation with theprivate sector There are about 600 cyber cafs in the country with 250 of them in Dhaka People are showing encouraging awareness for Internet use. Increasingly, the young

generation isutilizing the Internet facilities.

1.10 Working hours etc.

Working days Sunday to Thursday

Weekend Friday and Saturday (Many software companies, most hardware

companies, major branches of banks operate during Saturdays)

Time zone GMT+ 6:00

CountryIDD code 880

Dhaka city code 2

Working hours 9:00 am 5:00pm

(However, most private companies carry on till 6:30/7:00pm)

Special working hours/days The software companies involved with outsourcing and

international projects accommodate the time difference with theclients countries by customizing the working hours and workdays

1.11 Political risks with the industry

The government ofBangladesh has declared the ICT sectoras one of the major thrustsectors. This has prompted suitable/encouraging government policies for the sector.However, the sectoris not immune to the general political risks. The countryspoliticalrisks do not directly fall under the scope ofthis reportandtherefore, it is suggested toconsult otherreports to learn about the general political risks associated withbusiness. Inthis regard, the DoingBusiness,publishedby World Bankcould be very effective.

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2 Labourforce

2.1 ICT education in Bangladesh

In recent years, the growing number ofprivate universities has provided new andbroaderopportunities foraspiring ITprofessionals topursue relevant education. However, as theIT orientation is not quite widespread in the lower/secondaryeducation system, theindustry relies solely on the competencies the ITprofessionals obtain during their gradu-ation/post graduation levels. Companies are stating that the students have a lot to learnwhen they have graduated and as a result, special training and on the job trainingplay avital role in developing the workforce in the software companies.

At present, most of the university level IT education is concentrated on computerscienceand engineering courses15. According to a presentation16by Mr. Fahim MashroorChowdhury, CEO, Bdjobs.comLimited, the industry demand for ITprofessionalsperyear is about 2,800. The estimate isbased on an assumption of a 50 per cent industrygrowth and minimum 20 per cent attrition rate. Each yearthe number of IT graduatesfrom different universities is 2,000. However, about 50-70 per cent of the graduateschoose a non-software firm or go abroad. As a result, it is estimated that each yeartheindustry faces a net shortage ofqualified workers in the range of 1,800 to 2,600.

2.2 ITprofessiona ls skill matrix

The following tables show the academic qualifications and the skill set of the ITprofes-

sionals working in the software companies in Bangladesh.17 The findings are based onthe BASIS Survey 2005. The surveyinterviewed 1,100 employees working in 55 local ITcompanies.

Table 5: Academicqualification of technical professionals

[% (respondent) of total technical staffs in the surveyed software firms]

Graduate in Non-IT 19% (209)

Masters in Non-IT 23% (253)

Computerscience/engineeringgraduate (3/4yrs.) 35% (385)Masters in computer science/engineering 9% (99)

Diploma/certificate courses in IT 12% (132)

Other 2% (22)

(Source: BASISsurvey)

15) An overview of theITcoursecurricula isincludedin the appendix

16) Presentation made duringa roundtable on HRproblemsforsoftwarecompanies andpossiblesolutions

organisedby BASIS onJune /2005

17) Source: BASISsurvey 2005

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2 Labourforce

Table 6: Skill matrix of local software industry

[% (respondent) of total surveyed employees skilled inparticulararea]*

Programming language Database

Basic/VB 50% (550) MS SQL 40% (440)

C/C++/VC 28% (308) MS Access/FoxPro 39% (429)

C# 16% (176) Oracle 27% (297)

Java 24% (264) PHP 18% (198)

Net 24% (242) Operating system

HTML 34% (374) MSNT/2000 58% (638)

ASP 21% (231) Unix/Linux/Solaris 17% (187)

PHP 18% (198) Other technical skills

Javabean 18% (198) XML 21% (231)

JSP 16% (176) UML 17% (187)

CGI Perl 5% (55) Lotusnotes 4% (44)

Cold fusion 4% (44)

*There are instances where the same respondent identified multiple skill competencies

(Source: BASISsurvey)

2.3 Availability of skilled labour

According to Mr. Chowdhury, the industry faces few specific problems in availing ade-quate ITprofessionals18. The following table present these problems as well as the under-lying reasons.

Problems Reasons behind

Unavailability of a pool of employees

to be recruited Computer science course enrollment is declining

Better quality students opting for non-software industry

(mainly Telecom and Banking)

High attrition rate High salary range in Telecom and Banking sector

Absence of structured HRpolicy in most software

companies

Absence ofinstitutional infrastructure

forcontinuedtraining Lackoffinishingschool to groom fresh graduates

The curricula of training institutions do not match the

industry needs

Though the industry faces problems in the HR pool, the inspiring fact of the matteristhat the local software companies are seriously attempting to change the scenario. Thecompany chiefs and top management have admitted theirdifficulties, which is a goodsign in finding a solution. BASIS membershave already identified specific steps forimproving HRaspects of the software companies. Some of these are organisation spon-sored training, induction offinancial institutions, long-term internship and influencing

18) Mr. Chowdhury isone of the BASISdirectors andhe hasworkedas the chairpersonfor theHR Sub-

Committeeof BASIS. Theproblemshe identified werepresentedduringa HRRoundtable amongtheBASIS

memberrepres

entatives

.T

heparticipatingCEOs

andMDs

in thatroundtable agreedwith Mr. Chowdhurywhile discussingtheHRproblems in ITcompanies inBangladesh. In light ofthis, we can take the following

as the overallindustrywide view forBangladesh ICT industry

23


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2 Labourforce

academia. Additionally, the inclusion of a higher number of internationalprojects in theindustry hasprovided new impetus forprofessionals to seekopportunities.

2.4 Labourcost

There are three main categories ofsoftware companies that operate in Bangladesh; theseare locals,joint ventures (JV), and transnationals. The labour cost (salary range) variesacross the categories.

Following table displays the salary range ofdifferent categories ofprofessionals workingin the software industry.

Table 7: Salary range ofITprofessionals in Bangladesh Companies

Salary range (USD) Local19 JV20 Transnational21

Networkengineer 230 300 400 750 600 1200

Programmer* 75 400 400 700 400 1200

System architect 380 600 400 900 400 1000

System analyst 380 600 400 900 400 1000

Testing/QA 380 600 400 900 400 1000

Project Management 300 750 600 900 600 1200

Graphic designer 300 600 400 700 400 1200

Web developer 75 400 400 700 400 1000

* Depending on experience the range varies

2.5 Universities and training institutions

According to statistics of the Ministry of Education, there are 73 universities in the coun-try. Of them 21 are public universities while the other 52 areprivate universities. In termsoftechnical education, BangladeshUniversity ofEngineering and Technology (BUET) isthe leader. University of Dhaka (ComputerScience and Engineering Department),

Shajalal University ofScience and Technology (Sylhet) and Khulna University are alsoproducing good quality ITprofessionals. Thesepublic universities enjoy the qualityintakeadvantage overotherprivate universities. The difference in the intake is mainlythe result of the cost ofeducation. The students in the highereducation level inBangladesh mostly come from middle class families. The high cost ofeducation at pri-vate universities is still out ofreach for most of them. Naturally, the government sup-

ported public universities become the obvious choice. In addition, the public universitiesalso providebetterresources and environment (faculty, infrastructure etc.). Theprivateuniversities are new in the education system and most of them lackthebasic require-ments foruniversity studies. Some of theprivate universities, however, in the recent times(last 2-3 years) have done well in IT education.

19) Collected from a recentsurveyreport byMr.MohammadAshraful(the report isavailable athttp://

geekswithblogs.net/joycsharp/articles/84330.aspx). Somefiguresare collected through personalinterviews

20) Thefiguresare collected through personalinterviews

21) Thefiguresare collected throughpersonalinterviews


38/81

24


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2 Labourforce

The students pursuing IT education in the country have shown tremendous potential overthe yearswinning internationalprogramming contests, developing effective anti- virus

software and many othersuchachievements are very common forBangladeshi ITstudents. In this regard, BUET and Dhaka Universityhavebeen most successful. Amongtheprivate universities,North South University, Ahsanullah University ofScience andTechnology, American International University ofBangladesh, BRAC University,Daffodil University and East West University are some of the leading institutions in ITeducation.

The following tableprovides the web address for the leading universities in BangladeshforITeducation.

Table 8: Leading Universities forIT education in Bangladesh22

Bangladesh University ofEngineeringand

Technology(BUET)ww w.buet.ac.bd

Islamic University ofTechnology(IUT) ht tp ://www.iutoic-d haka.ed u

Dhaka University (DU) ht tp://ww w.univdhaka.ed u

Khulna University of Engineering andTechnology

(KUET)

Shajalal University of Science andTechnology

(SUST)

ht tp ://www.kuet.ac.b d

ht tp://www.sust.edu

North South University (NSU) ht tp://ww w.northsouth.ed u

Ahsanullah University of Science andTechnology

(AUST)

AmericanInternational University ofBangladesh

(AIUB)

ww w.aust.edu

ht tp ://www.aiub.ed u

East West University (EWU) ht tp://www.ewubd.edu

BRAC University (BU) ht tp://www.bracuniversity.ac.bd

Daffodil International University (DIU) ht tp://www.daf fodi lvarsity.edu.bd

In addition to the universities, there are number ofDiploma/Vocational Institutions inthe country whoprovide IT education. There are 20 government and 87private poly-technic institutes in the country. These institutions mainly offerdiploma courses onengineering subjects. Most ofthese centers areowned and administeredby the govern-ment through the Technical Education Directorate.

An unauthenticated source reveals that there are more than 1000private and public sec-torcomputer-training institutes offering IT skill development at various levels. However,the interviews with the stakeholders revealed a different scenario.

The industry experts (interviewed company CEOs and BASIS leaders) opined that the

training facilitiesinBangladesh for the ICT industry are inadequate. Especially, thetypes of trainingprovided are not in line with the industry requirements. Most of thetraining institutions provide training inbasic computerskills. Few specific institutions(NIIT, Aptech, Base etc.)provide advanced level of training courses. However, they lackthe relevance to the actual needs of the software companies. Professionals have the optionto acquire certificationsby Microsoft Certified Partners.
http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.buet.ac.bd/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.iutoic-dhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.univdhaka.edu/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.kuet.ac.bd/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.sust.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.northsouth.edu/http://www.aust.edu/http://www.aust.edu/http://www.aust.edu/http://www.aust.edu/http://www.aust.edu/http://www.aust.edu/http://www.aust.edu/http://www.aust.edu/http://www.aust.edu/http://www.aust.edu/http://www.aust.edu/http://www.aust.edu/http://www.aust.edu/http://www.aust.edu/http://www.aust.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.aiub.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.ewubd.edu/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.bracuniversity.ac.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.daffodilvarsity.edu.bd/http://www.buet.ac.bd/http://www.iutoic-dhaka.edu/http://www.univdhaka.edu/http://www.kuet.ac.bd/http://www.sust.edu/http://www.northsouth.edu/http://www.aust.edu/http://www.aiub.edu/http://www.ewubd.edu/http://www.bracuniversity.ac.bd/http://www.daffodilvarsity.edu.bd/


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22) Source:Personalinterview

25


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2 Labourforce

To overcome the deficiency of the institutional training facilities, almost all companiesdevelop in-house trainingprograms. Moreover, they strongly recommended foreign com-

panies coming to Bangladesh to do the same.

26


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3 Infrastructure

3.1 Internet bandwidth availability

Bangladesh hasjoined the Information SuperHighway through submarine connectivityin 2006. Bangladesh Telegraph and Telephone Board (BTTB) is the official custodian ofthe new connectivitybackbone. The BTTB authority has recently publicized a utilization

plan of the submarine connectivity. The following sections provide a summary of theplan and the upcoming Internet connectivity scenario of the country.

Bangladesh connects itselfto the submarine cable connectivity through the SEA-MEA-WE-4 consortium. Available capacity for BTTB in this cable is 468,000 MIU* Kmwhich may have a maximum of 64 STM-1 (10 Gbps) at the landing station. MIU isMinimum investment Unit that is equivalent toone STM-1. Out ofBTTBs total capac-ity, 50,000 MIU* Km has alreadybeen contributed to the common pool of the consor-tium forsale. The BTTB furtherplans to enhance the capacity of the cable indifferent

phases with minimal investment. Minimum capacity unit forthis cable is STM-1 i.e.BTTB has to utilize the capacity at STM-1 or multiple of thatbetween any two landingstations.

Although the connection to the Submarine Cable SuperHighway presents tremendousimprovement opportunities forBangladesh, the present situation in terms of Internetconnectivity is not at all satisfactory. The present VSAT backbone connectivity is slowerin nature and isprone to technical difficulties. The new Submarine backbone on theother hand, still has to be streamlined.

3.2 Bandwidth cost

The BTTB Internet connection sets the tone for the trend in connectivity. The fullranges of bandwidth/Internet connection costs are available at the BTTBswebsite( h t t p : //ww w .b t tb .n e t). Thefollowing sections describe the general cost ofgetting anInternet connection.

27
http://www.bttb.net/http://www.bttb.net/


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3 Infrastructure

Table 9: LOW COST Internet connectivity for corporate users23

Type of

connection*

Average

bandwidth

Backbone Initial

charge**

(USD)

Monthly

Charge (USD)

Technical support

64 kbps

(shared 2)70%

(of64kbps)

(Fiberoptic)

Submarine

Cable

380 170 1. Connection

within 7 days of

workorder.

64 kbps

(dedicated)100 %

(of64kbps)

Connectivity

100%

VSAT25%

(asemergency

back-up)

320 2. Connectionproblem

Instantly within

Dhaka

9 am 8 pm; at the

site

8 pm 9 am; over

the phone.

3. Backboneproblem

within 2hours.

Table 10: HIGH COST Internet connectivity for corporate users24

Type of

connection*

Average

bandwidth

Backbone Initial

charge**

Monthly

Charge(USD)

Technical support

64 kbpsdedicated

(withVSAT

support)

64 kbps

100%(of 64 kbps)

100%

(Fiberoptic)Submarine

Cable

Connectivity

100%

VSAT25%

(asemergency

back-up)

(Fiberoptic)

460

460

300

210

1. Connectionwithin7 days (max.) from

workorder.

2. Connectionproblem

Instantly

1 hour(max.)

within Dhaka.

Automated

monitoringsystem

dedicated

(withoutVSAT

support)

(of 64 kbps) Submarine

Cable

Connectivity 100%

with 24/7 on site

technical support

(assistancewithin15minutes).

Redundancy support

with 4VSAT

3. Backboneproblem

within 5 minutes

Average connectivity cost per month for1 kbps = 2.67 USD 25

* The client could opt forHigherBandwidthas well. However, according to InternetService

Providers, for typical usage 64 kbps isadequate

** The charge may vary according to location of the installation

23) Source: R-net Online(www.rnet-online.net)

24) Source:BangladeshOnlineLimited(www.bol-online.com)

25) Source:Agni SystemsLimited(ht tp:/ /www.agni .com)
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3 Infrastructure

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3 Infrastructure

3.3 Electricity and powerstability

The problem with electricity is one of the majorhurdles the software companies inBangladesh face. Through the ICT incubator26, there are special arrangements for anuninterruptedpowerline, but the othercompanies with offices all around the city mustarrange foralternative power sources. In this regard, most companies opt for an electricgenerator forsupporting the larger electricity requirement. They use UPS (UninterruptedPower Supply) and IPS (Instant Power Supply) forequipments and computersystems. Thegenerators and UPS/IPS are widely available in the market and are quite reasonable inprice. Whenasked to comment the cost addition to production due to this alternateelectricity support, one CEO of a local company said that the problem hasbeenprevail-ing forlast 2-3 years and in recent times it hasdeteriorated further. He does not seeimmediate improvement in countryspowersector. He strongly suggested on arrangingfor an alternate power source for any new ventures. However, he said that the additionalcost is very insignificant forhis company and it increases the cost by about 0.5 per cent.Most if not all IT joint ventures have assured that there is apowergenerator.

26) ICTIncubator: Governm entsupportedinfrastructure(floorspace, utility, net connection etc.)

facilitiesforsmallITentrepreneurs

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4 Hardware and technical back-up

4.1 Overall hardware market

The PC/Servermarket in Bangladesh is estimated at USD 129.4 million (2005).Springboard, a Singapore based Research Company revealed this in one of their recentresearch reports27. The report also said that the market growth rate in the first quarter of2006 (Jan-Mar) was 23.8 per cent as compared to the first quarter ofpreceding year. Thelaptop market expanded 24.0 per cent in 2005.

During Q4 2005, 48,340 PCs were shipped from international locations to end-users inBangladesh for a value of USD 37.7 million, up from 34,884 units in Q3 2005. For thefull year (Jan-Dec), the PCshipments expanded 16.4 per cent to 162,400, generating avalue of USD 129.4 million. Aggressive sales and marketing activities undertaken byMNCshave helped increase PC market growth.

The large enterprises (companies with more than 500 employees) and government sectorscollectively accounted foralmost half of total PC/server shipments in 2005. NGOs arealso an important source of funding for IT investment in the country, but generally,spending is routed through the public sector. Intheprivate enterprise market,banks andtelecom companies are largest on IT spending. The consumerand SME markets repre-sent significant long-term promise,but both segments are currently in the infancy stage.

4.2 Servers/workstationavailability

Locally assembled, often un-branded, machines continue to dominate the market, h

business opportunities within it & telecommunication industry (bangladesh)

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