Investment Incentive in Bangladesh Submarine Cable Network Essay Example

Investment Incentive in Bangladesh Submarine Cable Network Essay Example Investment Incentive in Bangladesh Submarine Cable Network Paper Investment Incentive in Bangladesh Submarine Cable Network Paper Investment Incentive in Bangladesh submarine cable network Self Introduction Bangladesh Submarine Cable Company Limited (BSCCL)  ( bsccl. com. bd/) having its Principal office at Telejogajog Bhaban 37/E, Eskaton Garden, Dhaka-1000 is the only company dealing with submarine cable business in Bangladesh. It has been incorporated as a Public Limited Company in 2008 It deals in provisioning of telecom infra structure service primarily via submarine cable and domestic high capacity optical fiber networks. Company is wholly responsible for Operation and maintenance of Bangladesh’s lone SEA-ME_WE 4 (www. eamewe4. com). It is a submarine cable system installed between Singapore and Marseilles France , having a total of 16 consortium members from 14 countries. Its total length is approximately 18,800KM and it provides basic internet backbone between South East Asia,, India, Middle east and Western Europe. Company is mainly responsible for realizing the concept of â€Å"Digital Bangl adesh† by the year 2021. Fig 1 (SEA-ME-WE 4 Network Diagram) [pic]Its main products are IPLC (International Private Leased circuit) in both half and full circuit categories and IP transit. The former product is a point to point physical international connectivity designed for the specific use of Internet Service Providers (ISPs), corporate customers, Banks and educational institutes whereas the later product provides the internet backbone. It’s main customers include BTCL, Bangla Tech, Novotel, Mir telecom,Orange telecom and all IGWs, IIGs, ISPs etc. Bangladesh, An Introduction: Bangladesh is strategically located in South Asia and borders between 24 00 N, 90 00 E with India in The east , west and north except for a small border in extreme south east with Myanmar (Burma). Bay of Bengal touches the south and south eastern shores of Bangladesh. It has an area of 143,998 SQ KM1 and is ranked as 94th biggest country2 in terms of area). Bangladesh is the  seventh most populous country3 and is among the  most densely populated countries  in the world with a high poverty rate. Politically, ever since independence in 1971, it has remained a victim of political turmoil including military coupes. However, after restoration of Democracy in 1991, country is enjoying a relative calm and economic progress and has been included in the Next Eleven4 economies in 2005. Key Macro Economics Indicators: As per table 1, shown below, Bangladesh GDP has enjoyed an average growth of more that 6% since 2006 and the forecast for 2011-12 is even better at 6. 5 %. Table 1 |Indicators |Actual |Revised |Projection | | |2006-07 |2007-08 |2008-09 |2009-10 |2010-11 |2011-12 | |GDP deflator |6. 8 |8. 8 |6. 4 |5. |5. 5 |5. 0 | |Average inflation (CPI) |7. 2 |9. 9 |7. 0 |6. 5 |6. 0 |6. 0 | Source:  Bangladesh Economic Review, 2009,  Ministry of Finance, GoB Average inflation (CPI) from 9. 9 in 2007-8 to 6. 5 in 2009-10 and it is predicted that it will further drop to 6. 0 for the fiscal year 2011-12. Gross investment (as percentage of GDP) has increased from 23. 6% in 2009-10 to 24. 3% in 2010-11 and it is estimated that it will increase to 25. % in 2011-12. Why Bangladesh There are a number of reasons, why investment should be made in Bangladesh. They are discussed as follows [1] (https://www. cia. gov/library/publications/the-world-factbook/geos/bg. html) [2]qq (https://www. cia. gov/library/publications/the-world-factbook/rankorder/2147rank. html? countryName=BangladeshcountryCode=bgregionCode=sasrank=94#bg) [3] (http://en. wikipedia. org/wiki/Bangladesh) [4](http://www2. goldmansachs. com/ideas/brics/book/BRICs-Chapter13. pdf,Page #161) . 1. Strategic location: Strategically located at the gateway of South Asia and Asian tigers of ASEAN region, Bangladesh provides an easy access to the booming economies of India and China which combined with the Bangladesh, provides a total of more than 2 billion people. 2. As per table 2 below, the internet penetration in Bangladesh in only 0. 4% whereas for developed countries like Korea , it is as high as 81% suggesting a room for an extremely explosive growth in the coming future. Table 2 Name |Population ( 2010 Est. ) |Internet Users, (Year 2000) |Internet Users, Latest Data |Penetration % Population) |User Growth ( 2000-2010 ) |Users (%) in Asia | |Bangladesh |158,065,841 |100,000 |617,300 |0. 4 % |517. 3 % |0. 1 % | |Source: ( internetworldstats. com/stats3. htm#asia) 3. As per table 3 4 below, according to a survey conducted by JETRO Japan, Dhaka offers the lowest cost for monthly wages of workers and mid level engineer. Table 3 [pic] Table 4 [pic] Source:  The 20th Survey of Investment-Related Cost Comparison in Major Cities and Regions in Asia JETRO ©, April 2010. Investment Plan: SMW4 consortium is planning for a third upgrade by the end of 2010. The total cost of up-gradation to be incurred by BSCCL is USD 07 million. The tendering process has been completed and the contract is going to be awarded to the US vendor tentatively by the first week of Dec 2010 and the tentative RFS date is last quarter of 2011. The project is going to be started at the start of fourth quarter of 2010, however, due to some technical hitch, which involves unsuccessful lab demo of the 40 Gbps per wavelength by the US vendor, the project is delayed. After the successful upgrading BSCCL will get a capacity of more than 3. 5 million MIU KM5 and the cost of per MIU KM is below the US$ 2. 5 which is one of the lowest per unit investment cost in any submarine cable. MIU KM is an abbreviation for Minimum Investment unit Kilometer. For example, for SMW4 cable, one MIU KM is equal to one STM1 per KM along the length of the cable. The increased capacity will help us to meet the ever increasing demand of international bandwidth by a variety of applications inc luding the broadband users, ISPs, financial and educational institutes. It is estimated that by 2013, we will successfully recoup our said investment. [5] ( freebase. com/view/en/miu_km)