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1. Industrial Sector in Bangladesh
Daffodil International University

2. Objectives of this Class
 Know about the Industrial sector of Bangladesh.
 Be familiar with the major Industry of Bangladesh
(ICT Industry and Telecommunication Industry).
 Identify the weakness and strengths of the ICT
Industry and Telecommunication Industry.
 Suggest the measures to enlarge the ICT and
Telecommunication Industry.

3. Industrial Sector of Bangladesh
It is making significant
contribution in the field
of our export income.
The contribution of the
industry sector to the
economy of
Bangladesh and in
GDP has been
increasing day by day.
Year Contribution of Industrial
sector in GDP (%)
1941-1950 4
1951-1960 5
1961-1970 10
1971-1980 11
1981-1990 12
1991-2000 15
2001-2011 30
2011-2012 31.26
Source: World Bank Report and
Ministry of Finance, Bangladesh
Industrial Sector in GDP

4. Focused Industry
ICT Industry
Telecommunicat
ion
Industry

5. ICT Industry
 ICT is regarded as a thrust sector and the present
government has pledged to build a digital Bangladesh
within 2021.

6. ICT Industry
ICT Industry
Information and communications technology (ICT) is often used as an
extended synonym for information technology (IT). The term ICT is
used to refer to the convergence of audio-visual and telephone
networks with computer networks. It covers the vast area of
information technology, communication technology and the
telecommunication technology. ICT industries are broadly
engaged in:
 Producing, selling and supporting computing and
communications equipment, peripherals and components.
 Producing, selling and supporting software for computing
and communications equipment and enterprise and user
systems.
 Providing, selling and supporting computing, information,
communications, software and hardware services.
ICT industries are a big and strategically important part of developed
as well as developing economies. It provides meaningful and
comfortable livelihoods for many people, generate good returns for
investors, pay lots of taxes, and generate lots of business for other
industries.

7. Development of ICT Industry
 Bangladesh has about five decades of experience in
using computers. In its early days the ICT sector in
Bangladesh mainly focused on hardware operations.
The first ‘second generation’, world mainframe
computer was installed in 1964 at Dhaka University.
 Soon after this several large banks and industrial
concerns started using computers, mainly for
accounting and payroll applications. The
 Bangladeshi gas and electricity companies also began
using computer systems for their customer billing.
 Unfortunately the financial crisis that the country faced
after its independence in 1971 hampered the
expansion of computer use in the Bangladeshi
corporate sector.

8. Development of ICT Industry
 In 1982 a computer center was established at the BUET.
This center, later renamed the Department of Computer
Science & Engineering.
 The innovation of software concerning ‘Bangla writing’
on computers materialized in 1987. An engineer named
Mainul Islam managed to write Bangla in an Apple-
Macintosh computer using his self-evolved font
‘Mainulipi’.
 After the introduction of the internet in 1996, the
development of exportable software and multimedia
systems commenced.

9. Development of ICT Sector (Cont.)
 Over the years several ICT related associations have
been established. The Bangladesh Computer Society
(BCS), association of the IT professionals, for instance was
formed in 1979.
 BCC, the Bangladesh Computer Council, is the
consequence of the evolution of the National Computer
Committee which the government constituted in 1983.
 The Bangladesh Computer Samity, the ICT industry
association, was found in 1987.
 BASIS, established in 1997, promotes the ICT sector
through awareness building, practical education for new
graduates and paid internships, and training programs for
mid-career employees.

10. Development of ICT Sector (Cont.)
In 1997 It is recognized that ICT industry is potential
sector and it’s has impact on the economy.
After that in collaboration with industry associations
(BCS, BCC, BASIS and BACCO) and international trade
support institutions the government has taken both
short and long term measures to support and
enhance development of the domestic sector and
increase the export of ICT products and services.
the government has formed a separate ministry in
2011 and has employed huge amount of resources
in several projects.

11. Development of ICT Sector (Cont.)
Now, there are over one thousand registered software and
ITES companies in the country employing over 70,000 ICT
professionals. Out of these companies, around 60% are mainly
domestic market focused while 40% are mainly export
focused (BASIS, 2014) The IT-enabled services (ITES) industry in
Bangladesh started about twenty years ago mostly as a
hardware vendor market.
At the moment, this industry is estimated to be worth around
US$400 million where approximately 70,000 professionals,
mostly IT graduates, are employed (Ahmed, 2014). The
industry is now exporting US$250 million IT and IT-enabled
services and products to sixty countries. (Mamun, 2014).
Combining all these efforts, the IT sector of Bangladesh is
expected to reach a target of $1 billion within the next few
years.

12. No. of Registered Software & ITES Companies 1000+
No. of BASIS Member Companies 705 (February 2014)
Approx. Revenue of Local Industry (incl.
Export)
US $ 400 million
Approx. Revenue from Software Tk. 790 crore
Approx. Revenue from ITES Tk. 1050 crore
Export (2012 -2013) US $ 101.63 Million
No. of Exporting Companies 160 +
No. of Export Destination Countries 60+
Approx. No. of Human Resource Employed
in the Industry
70,000
Source: BASIS, 2014

13. Prospects of ICT
 ICT industry in Bangladesh is still relatively small. Looking at
the characteristics of the market, and the growth of ICT
services and products exported from Bangladesh over
recent years we can conclude that the significance of the
ICT sector for the Bangladeshi economy will grow in the near
future.
 According to BASIS estimations within the next five years 1
% of Bangladesh’s total GDP will come from the software and
IT services sector and over 1,50,000 Software and IT professionals
will be working in the Bangladeshi IT industry.
Exports of IT and IT-enabled services stood at $124.72 million
fiscal year - 2014, according to Export Promotion Bureau.
Bangladesh exports software to over 50 countries, and the
government has attached the highest priority to building a
nation educated in IT, Hasina said.

14. BD software export

15. Government Initiatives for Promotion
 Exemption of Tax/VAT on Computer Hardware and
Software;
 Deregulation of Telecom Sector & Establishment of BTRC;
 Installation of Digital Data Network in all Districts and
Upazilas;
 Creation of Equity Entrepreneur Fund for the Investors;
 Distribution of computers to School/Colleges (MMC);
 Establishment of ICT Business Promotion Council
 Standardization of Bangla for Use in Computing Equipment
 Introduce Post-Graduate Diploma (PGD) Program in public
Universities to produce quality ICT Professionals;
 Internship program to provide on the Job training to new
graduates;
 Establishment of training Laboratories in the educational
institutions at Upazilla level; Community e-Centers
 Establishment of in the rural area throughout the country
by the Government & NGO;

16. Government Initiatives for Promotion
 Hi-Tech Park- A would class Hi Tech Park will be established on
231 acres of land near Dhaka with all modern facilities;
 128 Computer Labs in Schools and Colleges are going to be
established in 64 district headquarter and another 1500 at
upazilla level;
 Establishment of IT Village in Mohakhali is under consideration of
Government;
 Ministry of Science & ICT and Bangladesh Computer Council are
implementing e-government activities in the country.
 National Information and Communications Technology (ICT)
Policy 2015
 National Broadband Policy 2008 passed.
 Bangladesh has already entered into the arena of ADSL+2
Broadband, WiMax and 3G technology of the Internet.
Bangladesh is currently connected with only one optical fibre
submarine cable system (SEA-ME-WE-4) has already joined the
SEA-ME-WE-5 submarine cable.

17. Bangladesh Hi-tech Park Authority
Bangladesh Hi-tech Park Authority (BHTPA) is a government
agency in Bangladesh dedicated to establish, manage
and operate technology business parks throughout the
country.
Formed in 2010, BHTPA is now implementing the projects
including
 the Kaliakoir Hi-tech Park in Gazipur District and
 Jessore Software Technology Park.
Planned projects include
 Mahakhali IT Village in Dhaka,
 Barendra Silicon City in Paba Upazila of Rajshahi District,
 Sylhet Electronic City in Companiganj Upazila, Sylhet.

18. Bangladesh Hi-tech Park
 Bangladesh: The Next ICT Destination
 The Hi-tech Park Authority will provide IT training.
 Zunaid Ahmed Palak said smartphones, tabloids
and a series of such devices would be
manufactured in Bangladesh which will obviously
create hundreds of jobs.

19. Hightech Park
 Block II is expected to create over 70,000 jobs and
there will be a State of the Art facilities to provide
training to over 10,000 individuals.
 The parks are being developed with a target to create
one million job and five billion dollar export in IT sector
by 2021. The Kaliakoir hi-tech park to be set up on 355
acres of land under PPP basis.

20. High tech Park
 All kinds of local and international software
development companies, automobile companies
and different type of technology companies can
invest here, Hi-tech park officials informed.
 The hi-tech park is being set up aiming to create a
world-class business environment for targeted high
growth industrial sector and new business, develop
technological capability for the development of the
local industries, enter foreign markets by exporting
state-of-the-art technology products and develop
infrastructure to facilitate hassle-free industrial
operation with necessary support.
 https://www.youtube.com/watch?v=OKzky1yi7-o

21. ICT Policy 2009: At a Glance
In order to translate the vision for digital Bangladesh into a
reality, it is necessary to have an appropriate ICT policy. ICT
Policy 2009 has been framed to meet this need. The
objectives, as set-out in the policy to ensure the role of ICT in
national development, are to:
I. maintain social equity,
II. increase productivity,
III. ensure data integrity,
IV.assist education and research,
V. generate employment,
VI.increase export,
VII.enhance quality of health services,
VIII. ensure access to information for all,
IX. protect environment and strengthen disaster
management,
X. support expansion of ICT.

22. Strengths and weakness of ICT
Industry
Strengths
1.One of the biggest strengths of the ICT sector is the young
and educated workforce.
2.The technical knowledge of the Bangladeshi workforce is
considerably high.
3.Costs in Bangladesh are approximately 40 percent lower
than in India and Philippines.
4.Due to the large population the wages are still very
competitive. Bangladesh is even cheaper than competing
countries such as Sri Lanka and Philippines.
5.Employee readiness to work and lower costs are the
ultimate good looks of the Bangladesh market.
6.Bangladeshi services and products are better priced than in
other ICT offshore destinations.
7.Hardware platforms necessary for IT development are
available
8.The demand for computers and peripherals is booming at 20
percent.

23. Weakness
As a developing market Bangladesh has a fair set of weaknesses.
Most of them come from lack of skills. The main weaknesses are:
1.The main weakness of the Bangladeshi market remains
infrastructure and power shortages.
2.Another weakness is the lack of reliable infrastructure.
3.Internet speed, bandwidth and electricity are key problems that
regularly affect daily operations.
4.Bangladeshi ICT sector also suffers from poor international visibility
and lack of brand name as a global off shoring destination.
5.The ICT sector in Bangladesh is comprised of mainly small ICT
companies that currently seem to lack focus and scale to take up
large long-term projects.
6.There is a big lack of soft skills in Bangladesh. If you have 100
candidates for the job, probably just 2 have the right soft skills.
7.There is a gap between the industry needs and the IT graduates. To
solve the problem, companies need to offer trainings and internships
for post graduates.
8.Due to the lack of investments the competition is not tough and
the turnover of employees is lower than in other countries.
9.Political Instability hampers the development of ICT Industry.

24. Recommendations:
Recommendations for the GoB:
1. The visibility of Bangladesh as an ICT offshoring
destination needs to be improved upon.
 If the sector manages to collaborate by means of
partnerships then the capacity to serve MNEs can
be created.
 Improving infrastructure
Next to the existing sea cable and the landline with
India an additional undersea optical fiber cable will
be installed.

25. Recommendations
Recommendations for the private sector
 Bangladeshi ICT companies should specialize in
particular product and service ranges in order to
create more reliable and. unique sales.
 It would create business opportunities if Bangladeshi
companies offer products and services on a
standardized platform based on several market
segments within the ICT industry.
 to innovate and to move up the value chain.

26. Telecommunication Industry

27. Development of Telecommunication Sectors
Telecom services in this subcontinent were first introduced by the
British in 1853 with the setting up of the Posts and
Telecommunications Department.
After the independence of Bangladesh in 1971, Bangladesh
Telegraph and Telephone Corporation was set-up under the
Ministry of Posts and Telecommunications to run the
Telecommunication Services.
This was converted into a corporate body named Bangladesh
Telegraph and Telephone Board after the promulgation of
Bangladesh Telegraph and Telephone Board Ordinance No. XLVII
of 1975.
On 24th February, 1979; Telegraph and Telephone Board was
converted to “Bangladesh Telegraph and Telephone Board (BTTB)”
as a Government body with a mandate to provide basic
telecommunication services throughout the country in pursuance
of Ordinance No. XII of 1979 and from 1 July 2008, as per the
Telecommunication policy, 1998, BTTB was converted into a public
limited company - Bangladesh Telecommunication Company
Limited through another ordinance.

28. Development trend (Cont.)
The first boom in the telecom sector erupted when
Bangladesh government allowed private sector participation
in telecom industries by granting the permission to operate as
a private service provider in 1989.
 Bangladesh Rural Telecom Authority was the first private
company to get license from the government in 1989 to
operate and maintain digital phone exchanges in 200
upazilas.
 Sheba Telecom (Pvt) Ltd. Was also granted license in the
same year to operate in the rural areas of 199 upazilas.
 Bangladesh is pioneer among the LDCs to opening up its
mobile phone sector for private and foreign investment in
1989.
 Pacific Telecom launched the country's first mobile phone
service. Subsequently, three more mobile phone licenses were
issued, in 1996, 2004 and 2005.

29. Development trend (Cont.)
Between 1993 and 1996 the mobile phone services were
monopolized by one company; Pacific Bangladesh Telecom Ltd.
which did not let the customer benefitted, however, with the
commissioning of mobile phone service by Grameen Phone
Limited and Aktel in 1997, the situation started to improve in terms
of price reduction and quality. Later on the operation of Grameen
phone Ltd. can be considered as the golden period. The
subsequent arrival of Teletalk, a government enterprise in 2004,
Banglalink in 2005, and Airtel Bangladesh Ltd. in 2007 brought
immense market competition among the telephone operators.
Currently, six mobile operators and eight PSTN operators are
operating in a competitive market environment. As of now, the
tele-density (voice) of Bangladesh is around 63.74 percent. The
total number of mobile phone subscribers has just gone above 114
million at the end of January 2014.
 Today, more than one million people are involved directly or
indirectly in this sector. Besides, Government of Bangladesh
collects huge amount of revenue including tax, vat from this sector
which gives an immense opportunity for the development of socio-
economic condition of BD.

30. Number of Mobile Subscribers
There are 6 mobile phone operators in Bangladesh. These are: Airtel,
Grameenphone, Banglalink, Citycell, Robi, Teletalk (Branded as). The
number of mobile phone subscribers in Bangladesh as of January 2014 is
114 million.

31. Problems of Telecom Sector
a) High Competition: High competition in mobile or telecom sector in
our country is one of the main problems. If we have a look in the primary
stage of our telecom sector, we had only city cell and Grameen phone
and they were operating their business in own way. They took the first
mover advantages but when Banglalink, Robi, Teletalk, Airtel come to
compete in the market then the market became more competitive
and still there exist a high competition.
b) Poor Economic Background: As a developing country Bangladesh
has a poor economic background where a portion of people are living
under the poverty line. So it is difficult to operate such type of business in
Bangladesh with making a good profit.
c) Instable Political Situation: Our previous history tells that Bangladesh is
not a politically stable country. Different types of political violence,
corruption and problems make our country instable and also has made
this sector insecure. Sp for we don’t have more foreign direct
investment (FDI) in any of the sector.
d) High Rate of Corporate Tax: As the economic condition is not good
of Bangladesh, the telecommunication sector is not able to make profit.
Moreover they are to pay high corporate tax which is 40%-45%. It is
another major problem or challenge to operate challenging day by
day.

32. Problems (cont):
e) SIM Tax: In Bangladesh the mobile operator is to pay Tk. 800-
1200 as tax in each SIM from fiscal year 2005-06. Firstly it was Tk
1200 and later it is fixed as tk 800. Though tax is to paid by the
subscribers directly but the company give incentive to
continue the sell the SIM in the competitive market to hold
their position. As the growth rate of the subscriber has been
declined, the companies are in challenging position.
f) Import Tax: In case of technological perspective,
Bangladesh is not good enough. So mobile phone operators is
to transfer or import technologies, hand sets and other
equipments related to the telecommunication and for this
they are to pay 35% import tax on it.
Other Problems:
 Lack of optical fiber cables
Less monitoring
 Foreign suppliers often supply low quality materials,
which result in low quality product
 Uncertainly of electricity

33. Contribution of Telecom Sector of BD
According to a report of world famous Auditing Institution Deloitto, “In
developing country, if using of mobile phone increased by 10%, govt.
revenue will increase by 1.2% in a year.” Moreover it plays:
1. Job Creation and Reduced Unemployment: A study show that till 2008, 6
lakh 75 thousand people of BD are directly or indirectly involve in this
sector for job and among them 15% are women.
2. Sources of Government Income and Revenue: It is one of the largest
sectors for government to get revenue. The contribution of telecom sector
in our country’s total GDP is around 1.46%.
3. Listed in Stock Market : Though telecom started its business in private
sector but currently Grameen P hone has been listed in stock market.
4. Dramatic Changes in Communication System: Cellular phone has
brought a dramatic change in the communication system in our society.
Life has become fast, easy and comfortable.
5. Develop Corporate Culture : Telecom sector specially phone company
is the pioneer to establish the corporate culture in Bangladesh.
6. CSR and Telecommunication: The telecommunication sector plays
important role by contributing to health, education, environment
sports and all other social sector as corporate social responsibility (CSR).

34. Thing to do for development
Imparting training to make skilled workers.
Reducing of VAT and taxes.
Stabling the Political Situation.
Reducing tax on SIM and sacrifice more to operate their
business.
Developing ICT Capacity.
High Rate of Corporate Tax.
ICT access opportunity for the citizen
Reducing tax on technologies, hand sets and other
equipments related to the telecommunication
Conducting more research works for developing
telecom sector
Use of cost reduction strategy of internet

35. 1. Information Technology in Bangladesh, Sustainable Development
Networking Programme By Dr. Jamilur Reza Choudhury, 2013.
2. Bangladesh Computer Council By Mahbubul Alam, 2013.
3. Information technology to contribute 7.28 percent to GDP by 2021, in
Bangladesh Sangbad Sangstha. 20 July 2013.
4. The Bangladesh Telecoms Sector: Challenges And Opportunities By
Ifty Islam, Asian Tiger Capital Partners.
5. Problems and Prospects of Telecommunication Sector of
Bangladesh: A Critical Review By Ms. Farhana Zamil and Md. Miraj
Hossen
6. Banglapedia
Reference

36. Chapter Related Questions
 Discuss the development of ICT sector in Bangladesh.
 What are the strengths and weakness of ICT industry?
 Discuss the government initiatives in the development of
ICT Industry.
 What is the prospect of ICT industry in the economic
development?
 What are the problems of telecommunication industry of
Bangladesh?
 Discuss the development of telecommunication Industry
of Bangladesh.
 Describe the contribution of telecommunication Industry .
36