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Internet's high tariff discourage local investors PDF Print E-mail
Monday, 17 December 2007

The government's high internet tariff is holding back the country's software industry to have a strong position in the global market, says the chief of software makers' association.

The government has slipped into a deep sleep in terms of providing affordable internet tariff rate for consumers, Rafiqul Islam Rowly, president of Bangladesh Association of Software and Information Services (BASIS), told The Daily Star on Saturday.

"High tariff rates discourage local investors to invest in the software sector," Rowly said.

Local software firms have to pay Tk 35,000 a month for 256 kbps (kilobits per second) dedicated internet connection to Bangladesh Telegraph and Telephone Board (BTTB). But in India, firms pay the amount that is hardly 1,800 in Bangladeshi taka for the same connection.

BTTB's charge for 512 kbps dedicated internet connection is Tk 62,500 and for 1 megabit is Tk120,000. In India, charges for the same connection are Tk 4,500 and Tk 7,500.

India earns about $12.5 billion annually from information technology outsourcing and revenues are growing at 30 percent a year.

The BASIS president also mentioned the country's 'image problem' as one of the major barriers facing local software industry.

If anybody thinks Bangladesh means a country of flood and political chaos, business will not come here, Rowly explained.

Asked if there are other reasons, he said, "Our banks are not ready to provide loans for the industry as they do for other sectors."

Bangladesh's software industry is growing with the ability to offer quality jobs to the global giants at competitive rates, but the high internet tariff fails local software firms to enhance competitiveness, Rowly said.

Rowly sounded optimistic about the growth prospects. As the local companies are making customised software at competitive rates, they have already carved a niche, he said.

Citing an example, Rowly said a local software firm can provide a company with software solutions at a cost of Tk 10 lakh. But a foreign firm will charge Tk 3 crore for the same solutions, he added.

The size of the local software industry is around Tk 300 crore and it is growing 15 percent a year.

BASIS president believes India's growth in software industry is not harmful to Bangladesh.

"I don't think the entry of global software giants into the Indian market will pose threat to Bangladesh since India is looking for 2.5 lakh overseas software professionals by 2008. So, opportunities beckon Bangladeshi professionals," Rowly said.

According to a recent report by IDC, one of the world's leading market research firms, Bangladesh is number one for software piracy in Asia Pacific, and has the fourth highest levels of illegal software usage in the world.

Rowly said software piracy is a common phenomenon in developing countries, but in Bangladesh the rate is certainly very high. He said awareness of people is needed to fight the malpractice.


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