BUSINESS OPPOrTUNITIES WITHIN

THE IT AND TELECOMMUNICATION
INDUSTrY
BANgLADESH
Danida
A sector study prepared for Danida
by Håndværksrådet (The Danish Federation of
Small and Medium-Sized Enterprises)
in collaboration with
Muhammad Hasibul Hasan,
Bangladesh
November 2006
Business Opportunity Study
within the IT and
Telecommunication Industry
in Bangladesh
© Ministry of Foreign Affairs of Denmark
Danida
November 2006
Publisher
Ministry of Foreign 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: www.b2bprogramme.com
www.b2bprogram.dk
Production
The Danish Federation of Small and Medium-Sized Enterprises (DFSME)
Islands Brygge 26
DK-2300 Copenhagen S
Phone: +45 33 93 20 00
Internet: www.hvr.dk
and
Muhammad Hasibul Hasan
Apt. # C5, H # 8, R # 13
Dhanmondi Residential Area
Dhaka – 1209, Bangladesh
Phone: +880 2 8120872
Cell phone : +880 189 286926
Design
Designgrafk.dk
Coverphoto
Kristian Granquist
The report can be downloaded from:
www.b2bprogramme.com
ISBN 978-87-7667-764-0 (Internet version)
ISBN 978-87-7667-765-7 (print version)
3
Executive Summary
ICT industry in Bangladesh
Industry profle
ICT industry in Bangladesh is relatively new in comparison to other business sectors.
However, the unlimited potential of the ICT sector has commended inquisitive interests
from all concerned. The impact of global hype of the ICT sector is clearly visible in
Bangladesh as well. In the recent years, the local ICT sector has grown enviably.
With over 3,000 local enterprises operating in hardware, software and ISP segments, the
size of Bangladesh ICT industry at present stands at USD 160 million. With the advan-
tage of earlier initiation, the hardware segment dominates the market share (65 per cent)
while the relatively late entrant, software segments command about 15 per cent of the
total market. The ITES segment (15 per cent) and Internet and Network Services (5 per-
cent) make up the remaining part of the market.
The software segment is relatively new in the market; however, the segment is showing
healthy growth in terms of export earnings. According to Bangladesh Bank sources,
export earnings from Software and ITES was USD 27.01 million in 2005-06, registering
a growth of 113 per cent from the previous year. The software companies in Bangladesh
mainly focus on servicing the IT/ITES needs of the local leading sectors like Garments,
Banks and Government. At the same time, leveraging the global nature of the IT busi-
ness, the local entrepreneurs are always looking for international opportunities. Thanks
to these efforts, Bangladesh now has become one of the most potential outsourcing desti-
nations in the world.
The core strengths of Bangladesh ICT sector is the people. An educated, trainable and
young workforce working in this sector possesses the required skill sets to compete in the
global scenario. A BCS source revealed that in 2006, the number of IT professionals in
Bangladesh was 25,200, which was 12.50 per cent higher than in 2005. The majority of
this work force excels in pure technical tasks such as programming and networking. In
fact, 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 in programming and net-
working jobs. However, the same survey states that, much to the delight of the industry
experts, the number of ‘non-code’ personnel in the IT companies is rising at fast pace.
The success of the IT industry has prompted many relevant associations to evolve to pro-
vide focal points for entrepreneurs and foreign investors. The government of Bangladesh
has declared the ICT sector as ’thrust’ sector. The creation of a separate Ministry for ICT
(Ministry of Science and Information and Technology), formulating favorable laws and
initiating government IT projects are encouraging steps for the local/international inves-
tors in the Bangladesh ICT industry. In addition to the policy development, the govern-
ment is keeping close interactions with various industry associations. BASIS, BCS, BCC
and ISPAB are some of the apex bodies working for the improvement of the ICT indus-
try in Bangladesh.
4
Labour force
Bangladesh enjoys a clear competitive advantage in its IT labour force. The leading uni-
versities in the country provide 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 sector as well.
The most signifcant advantage of the Bangladeshi workforce is the low wage rates. The
salaries for IT professionals could be as low as USD 75/month. On the other hand, the
higher salary ranges at approximately USD 1,000-1,200/month. The quality of the grad-
uates coming out of various institutions is satisfactory. Bangladeshi students have proved
their potentials in the international competitions by winning a number of programming
contests.
However, the available workforce is still not adequate to meet the industry demand.
According to Mr. Fahim Mashroor Chowdhury, CEO, Bdjobs.com (BASIS director as
well), each year the industry faces a shortage of about 1,800 to 2,600 professionals. He
identifed the ‘brain drain’ and a ‘perceived lack of career prospects’ as the two major rea-
sons for this short fall. Along with other industry experts, he suggested improving the
industry-academia collaboration to produce the right people for the right jobs.
Infrastructure
Bangladesh has been building its infrastructure support for the IT industry over the
years. This year, the country ensured global connectivity by connecting to the
‘Information Super Highway’ through SEA-MEA-WE 4 consortium. High-speed
Internet connectivity through fber optics cables costs about USD 2.67/per month for 1
kbps connection. The existing VSAT backbone will continue to remain the major
Internet infrastructure until the new Backbone (Submarine Cable Connectivity) operates
100 per cent. There are as many as 150 ISPs in the country and the competition among
Internet service providers has resulted in signifcant improvement in their services. Most
of the ISPs are now providing 24/7 on-site technical support.
In relation to infrastructural weaknesses, all the stakeholders identifed stable electricity
as the top priority. In general, the country lacks adequate electrical supply. The compa-
nies operating in Bangladesh, therefore, must make alternative arrangements to ensure
smooth power supply, This has developed a strong market for alternative power equip-
ment in the form of UPS (Uninterrupted Power Supply) and IPS (Instant Power Supply).
For smaller projects, the cost addition due to power shortage may not be signifcant, but
for larger projects the cost of a project may increase for this reason.
Hardware and technical back-up
According to research by Springboard Singapore, the volume of the hardware market in
Bangladesh is USD 129.4 million at present. Locally assembled and often unbranded
machines dominate the pc/server market. However, most of the international giants
(HP, IBM, and Dell etc.) are present in the market through their local agents.
Executive Summary
5
The cost of a PC or server in Bangladesh is in line with world market prices. A branded
server with basic confguration costs about USD 6000 whereas the ‘unbranded’ version
costs about USD 2,000. The average workstation price is USD 700-900 for a brand PC
and USD 500-600 for a clone PC.
After sales support of the hardware is satisfactory. Most large organisations usually go for
AMCs (Annual Maintenance Contract) with the vendors. The AMC is customizable in
accordance to the client’s need. However, the local vendors are of the opinion that an
international warranty is not always suitable for clients of brand equipment. Their logic is
that the designated vendors (local agents) would always keep their direct customers on
their priority lists. Additionally, the international warranty does often not make them
directly obligated to provide local support.
Industry competencies
As stated in earlier section, cheap labour is the biggest competency for the Bangladesh
ICT industry. The skilled labour force is easily trainable and quick learners. They also
show greater commitment to specifc areas of concentration – provided the employers
carefully build the loyalty.
The industry experts opined that the geographical location of the country is suited to
reach out to other markets in Asia. Additionally, India is moving to a higher strata of the
global IT market, which has created an opportunity for Bangladesh to capture the lower
niches (left by India) of the market.
Bangladesh does have willing investors with comprehensive local business knowledge.
The investors in other sectors (textile, garments etc.) have proven their competencies in
international business. They are good at spotting new business opportunities and imple-
ment them effciently. The favorable government policy for the ICT industry is attracting
these investors towards this sector. With their accomplishments in international busi-
nesses, they could become the ideal strategic partners for international companies intend-
ing to venture into Bangladesh ICT industry.
Regarding specifc competencies, Bangladesh at present is more suited for less complex
projects such as web content development, mobile content development, back offce soft-
ware development, 2D/3D animation, desktop publications and call centers. Bangladesh,
however, possesses potential to move up the ladder for 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 in
the world. Danish companies could easily venture into this readily available opportunity.
The telecom boost in the country presents another opportunity for the IT companies as
support service to the telecom companies. The major focus of the telecom opportunities
lie in the form of mobile content development and value added service solutions. The
government is yet another big opportunity that is worth pursuing. To act on its declara-
tion of ICT as ‘thrust sector’, the government is seriously taking initiatives towards public
Executive Summary
6
IT projects. The focus of these projects is in the form of e-governance and offce automa-
tion.
The SME sector in Bangladesh has the potential to become a lucrative market niche for
the Danish companies. According to a survey report (by BASIS-KATALYST), the ‘latent
IT/ITES demand’ of the specifc SME segments is about USD 17.94 million. The report
also suggested that demand is gradually growing along with the increase in the awareness
level of the SME entrepreneurs.
The opportunities exist without any doubt. Moreover, Nordic companies are making use
of these opportunities already. The successful companies in Bangladesh identifed pre-
planning and market-analysis as two of the major success factors for new companies
entering the Bangladeshi IT industry.
Market threats
The Bangladeshi IT industry has many of the right ingredients for success, however,
according to the industry stakeholders, some existing/perceived threats for the industry
remain.
At individual company level, the business vision (or lack of it) of the local IT entrepre-
neurs is the biggest threat. Groups of companies have many times started in IT as a
chance venture. This naturally, in most cases, did not succeed. On the other hand, the
lack of fnance for the ‘real’ IT entrepreneurs has limited them from reaching their true
potential.
The country’s IT policy is favorable, yet, Bangladesh faces a big threat of ‘resource
crunch’ in the near future. Brain drain and attractiveness of other business sectors are
reducing the number of professionals pursuing an IT career.
Bangladeshis are used to short term proft from investing in the textile business. Many of
the investors from this sector are also expecting short-term proft in the IT business.
The management style in Bangladesh is largely based on a top-down approach. Apart
from clashing directly with the Danish/Scandinavian style i.e. each person is responsible
for its own job – it also means that Bangladesh is short of middle management skills.
In Bangladesh, the process of legally establishing a company takes a long time. It can
take up to six months to obtain the necessary licenses, approvals etc.
The existing supply of Internet access is somewhat constrained. The costs of Internet
access are relatively high, and even at high costs no optimal connection is yet available.
China, Vietnam and similar countries pose a future threat to the Bangladeshi IT indus-
try. The industry prospect/potential for those countries is very similar to Bangladesh. In
addition, they enjoy more stable political situation. The even feld in the lower strata of
IT industry – created by the fact that India moving to higher strata – provides equal
chance for all potential countries like Bangladesh, China, Vietnam etc.
Executive Summary
7
SWOT
The specifc success factors that Danish companies could leverage when entering the
Bangladesh ICT industry are:
• Business Vision (taking IT as core business)
• Management Practices (proven effective management practices and business
acumen)
• Business linkages (links with prospective clients in Nordic/EU regions)
• Regional knowledge (knowledge of the business practices of the regions from
where many outsourcing projects placed)
• Danish Government’s presence (support for relationships between Danish
and Bangladeshi companies)
The Danish companies, however, need to improve on some aspects if they are to succeed
in Bangladesh. The foremost success factor is to improve local knowledge. Similarly, the
HR management needs to be customized to suit the local culture. Overall, the commu-
nication barriers are to be addressed properly.
Entering Bangladesh would help Danish companies in expanding their market and
would help them enter new markets. In the long run, Danish companies could venture
into the potential Asian markets and they could capture the SME market niche in
Bangladesh and in other regions. However, the road to success presents some challenges
for Danish IT companies. The lack of methodical approach of Bangladesh IT companies
(and IT professionals) and their lack of information could become major hurdles in busi-
ness planning. On the operational aspect, the training requirement and communication
barrier has to be addressed properly to achieve the desired outcome.
Executive Summary
8
Table of Contents
Executive Summary 3

1 Introduction to Bangladeshi ICT industry 11
1.1 Number of enterprises 11
1.2 Size of enterprises (industry volume) 12
1.3 Proportion of GNI 13
1.4 Export of ICT services 13
1.5 Key areas of operation 14
1.6 Investment scenario 15
1.7 ICT industry employment scenario 15
1.8 Related associations/governing bodies 16
1.9 Tax rules and other policies 20
1.10 Working hours etc. 21
1.11 Political risks with the industry 21
2 Labour force 22
2.1 ICT education in Bangladesh 22
2.2 IT professionals skill matrix 22
2.3 Availability of skilled labour 23
2.4 Labour cost 24
2.5 Universities and training institutions 24
3 Infrastructure 27
3.1 Internet bandwidth availability 27
3.2 Bandwidth cost 27
3.3 Electricity and power stability 29
4 Hardware and technical back-up 30
4.1 Overall hardware market 30
4.2 Servers/workstation availability 30
4.3 Servers/workstation price 30
4.4 Availability of technical support 31
4.5 Major hardware companies’ presence 31
5 Key competencies in Bangladesh’s ICT sector 32
5.1 Key industry competencies 32
5.2 Software application competencies 33
9
6 Local market opportunities and threats 35
6.1 Specifc market segments 35
6.2 Micro level 36
6.3 Macro level 36
6.4 International 37
7 SWOT 38
Appendices 41
List of abbreviations 41
Reference web sites 42
Case study 43
Interviewed companies 46
Outline of the CSE course curriculum 51
Acknowledgments 51
10
11
1 Introduction to Bangladeshi ICT industry
During the late 90’s, Bangladesh has seen an increasing growth of the ICT industry.
Initially, the favorable tax policy of the government of Bangladesh in 1998 accompanied
by the global affordability of personal computers have had tremendous impact on the
usage of computer. The favorable import tax policy on computers and computer accesso-
ries during that time was one of the timely steps taken by the government of Bangladesh.
From then on, in accordance with the global trends, both private and public sectors in
Bangladesh caught up with effective utilization of information technology. The forma-
tion of a substantial number of software development companies is a good indication of
this development. Recently, wide spread telecommunication (especially the cellular
telephony) outreach all over the country has given the ICT industry in the country an
added impetus to move forward.
1.1 Number of enterprises
A report by Bangladesh Computer Samity (BCS) provides an overview of the composi-
tion of ICT enterprises in Bangladesh. However, the report is focused on software, hard-
ware, Internet services and training and other segments and the statistics of the telecom-
munication enterprises are not included in that report.
Fig. 1: Number of ICT enterprises in Bangladesh
c
çcc
1ccc
1çcc
zccc
zçcc
¸ccc

Rardware
Software
ISP
Training and others
(Source: BCS)
As seen from the fgure, the hardware segment dominates the industry with 2500 enter-
prises in 2006. In accordance with the growth in hardware demand, this segment has
shown a steady growth of about 11 per cent per year from 2000 to 2006. The software
segment grew at good rates in earlier years but has slowed down relatively in the recent
years. At present, there are about 350 software development frms in Bangladesh. The
Internet Service Provider (ISP) segment is in tune with the growth of software segment.
12
The recent introduction of advanced technological backbone in the ISP shows a decent
growth of the ISP segments (presently 150 ISPs are operating in the country). There are
150 training institutes and auxiliary ICT support companies in the country.
The telecommunication segment is sometimes treated separately in the country, but the
impact and the huge volume of the telecom segment is quite signifcant in the total
industry performance. According BTRC
1
, the number of mobile phone users has reached
15.5 million in August 2006. According to ITU
2
data, currently, Bangladesh has around
1,000,000 fxed telephone lines installed by the BTTB
3
, Sheba Telecom and Bangladesh
Rural Telecom Authority (BRTA). The present tele-density in Bangladesh is approxi-
mately 0.5 per cent.
1.2 Size of enterprises (industry volume)
A report
4
included in the “Software Product Catalogue (2006)” published by the
Bangladesh Association of Software and Information Services (BASIS) states that the
total ICT market size in Bangladesh is USD 160 million. The approximate proportion of
the ICT industry among different segments is as follows.
Table 1: Domestic ICT market in Bangladesh
Market segment Volume (million USD) Proportion (per cent)
Computer and network hardware 105 65%
Software 24 15%
Other ITES
5
24 15%
Internet and network services 8 5%
(Source: BASIS)
Fig. 2: Bangladesh domestic ICT market (major) segments
Computer and network 6ç%
Software 1ç%
0ther ITES 1ç%
Internet and network services ç%
1) BTRC: Bangladesh Telecom Regulatory Commission
2) ITU: International Telecommunication Union (ITU)
3) BTTB: Bangladesh Telephone & Telegraph Board
4) Bangladesh Software Industry and its dynamics
5) ITES: IT Enabled Services
1 Introduction
13
1.3 Proportion of GNI
As per Word Bank source, the GNI indicators for Bangladesh are as follows:
6

GNI (million USD) 66,646
GNI per capita 141.8
The available data for the sector specifc GNI were not available. However, taking the
total ICT industry size as USD 160 million (source: BASIS), the approximate GNI from
ICT sector comes to 0.002 per cent of the total GNI. The export earning from software
for year 2005-06 is very nominal 0.0004 per cent of the total GNI.
1.4 Export of ICT services
According to the Bangladesh Bank source, export earnings from Software and ITES was
USD 27.01 million in the fscal year 2005-06 registering a high growth of 113 per cent
from the previous year (2004-05). The following chart shows the Bangladesh software
and ITES export earning for last fve years.

Table 2: Export earning of Bangladeshi 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
Yearly growth - 25% 51% 51% 76% 113%
(Source: Bangladesh Bank)
Fig. 3: Software export from Bangladesh

o
ç
1o

zo

¸o
z
o
o
o
-
o
1














z
o
o
1
-
o
z

























z
o
o
z
-
o
¸





































z
o
o
¸
-
o
µ

















































z
o
o
µ
-
o
ç





























































z
o
o
ç
-
o
6














z
o
o
1
-
o
z



























z
o
o
z
-
o
¸









































z
o
o
¸
-
o
µ






















































z
o
o
µ
-
o
ç





































































z
o
o
ç
-
o
6
4PGUXBSFFYQPSUQFSGPSNBODF :FBSMZFYQPSUHSPXUI
o

¸o
µç
6o

ço
1oç
1zo
6) Source: http://www.doingbusiness.org (Word Bank - Doing_Business_2007_Country_pages.pdf)
1 Introduction
14
According to industry experts (BASIS leaders), the recent development in joint ventures
and business collaborations among Danish companies and Bangladeshi software compa-
nies would assist signifcantly in sustaining the enviable growth in the export earning.
Some of these projects are already in place and many others are either in the pipeline or
perceived to be coming in the near future. Another factor that has contributed to the
recent high export growth is the infuence of the multinational telecom companies.
These companies while operating in Bangladesh utilized the local IT sector for many of
their international projects giving a good software export opportunity for Bangladesh. At
present, there are about ffty companies in the country engaged in exporting software
and 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 Asian
countries.
7
1.5 Key areas of operation
BASIS carried out a survey among the 152 participating companies in SOFTEXPO
8

2005 to fnd out some key industry trends
9
. One of the fndings of this survey provides a
good insight into the client/industry focus of the software companies operating in the
Bangladeshi market. The following section reproduces the fndings of the BASIS survey
of operational domains of the software companies.
Fig. 4: Industry focus of Bangladesh ICT (software segment) industry
o % 1o% zo% ¸o% µo% ço% 6o%
Textlle & garment
Pharmaceutlcal
0overment
Flnanclal sector
healthcare
Chemlcal lndustry
Telecommunlcatlon
hospltallty
Fducatlon
0efence servlces
0ther
The industry analysts fnd the survey results positive because of the fact that a signifcant
proportion of the software companies (57 per cent) are focusing on the government sec-
tor. The obvious implication is that the public ICT projects are increasing in numbers
7) According to BASIS survey (2005) [152 BASIS members and non members companies were surveyed]
8) Yearly software & ITES exposition organised by BASIS
9) This section explains one of the trends and other sections (Labour force) explains the other fndings
of the survey
1 Introduction
15
and attracting business people towards them. The focus of the government spending on
IT is targeted towards e-governance and offce automation. The public sector is the larg-
est domestic segment for software (IT) companies in Bangladesh. Greater access to this
sector has defnitely provided added impetus for the local ICT industry.
Among other sectors, the textile and garment and the pharmaceutical industry stand out
(both at 60 per cent). The textile and garment industry is the largest export sector in
Bangladesh. The international exposure and competition of the sector have prompted the
garment manufacturers to streamline their productivity. The most effective and readily
available option was the introduction of process control through automation. As a result,
many export oriented garment companies opted for phase-by-phase automation and thus
created opportunities for the local IT companies. Similar scenarios exist in the pharma-
ceutical industry. However, contrary to garment and textile industry, the pharmaceutical
industry focuses on fulflling the needs of the domestic market.
Another key operational area for the IT companies is the fnancial sector. In recent years,
the banks are going online – creating a huge demand for software and network solutions.
However, so far, foreign software dominates the banking sector.
The hardware/server market segment in Bangladesh is doing relatively good in its opera-
tions. A recent Springboard
10
research reported that Bangladeshi PC/server market gen-
erated growth of 23.8 per cent in Q1 2006 (Jan-Mar), compared to the frst quarter of
the preceding year.
From a buyer perspective, large enterprises are currently the dominant segment of the
market, contributing around 23.0 per cent of the total PC/Server shipments
11
. The large
corporations – particularly in banking and telecom – are the key customers driving mar-
ket growth. The government segment showed strong growth of 30.7 per cent annually
mainly due to the increased automation activities of local and national bodies. The SME
market represents a signifcant portion of shipments (33.9 per cent) in Bangladesh but
receives limited focus from IT vendors due to the substantial opportunities in the govern-
ment and large enterprise sectors.
1.6 Investment scenario
The lion’s share of the ICT market in Bangladesh is dominated by the international
giants like Microsoft, Oracle, Sun etc. The off the shelf (packaged/license) software were
introduced 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 Bangladesh brought in their global software. Though,
recently they have been working with local companies in procuring their ICT require-
ments. One other aspect of the investment scenario is the presence of international soft-
ware vendors through local agents. Microsoft in this regard leads the way.
10) A Singapore based market research company (http://www.springboardresearch.com)
11) The shipment refers to No. of PC/Server coming to Bangladesh.
1 Introduction
16
Mainly, the initiation and implementation process of IT projects at the organisational
level is done through market exploration and an internal operational requirement assess-
ment. The exploration based on the internal assessment mainly takes place in the form of
market research for available solutions. In this case the more established companies
(MNCs etc.) have their own in-house IT consultancy support available. For the other
segments, the proper IT planning is sometimes missing. In light of that, an opportunity
exists for IT consultants. There are a few such consultancy support companies who have
started their formal operation (Microsoft, IBM etc.), but in most cases advice is sought
from individuals with IT knowledge.
1.7 ICT industry employment scenario
The total number of IT professionals available in Bangladesh is more than 25,000
12
.
The booming telecom industry has created a large IT related employment. As a result,
the technological professionals are switching over to the telecommunication industry
leaving alarming many vacancies in the other ICT segments. The most severely affected
is the software segment.
Table 3: IT professionals in Bangladesh
Year No. of professionals Yearly growth
2000 11,440 -
2001 15,840 38.46%
2002 18,960 19.70%
2003 19,720 4.01%
2004 20,480 3.85%
2005 22,400 9.38%
2006 25,200 12.50%
(Source: Bangladesh Computer Samity (BCS)
The BCS reports that in 2006 the number of IT professionals increased by 12.50 per
cent. When considering the yearly growth, the table shows that there is a slow growth in
the 2003-04 period. The reason behind is that the introduction of telecom companies
encouraged many aspiring professionals to choose a business education instead of IT
studies. However, the trend in the number of IT professionals is gradually increasing as
the career opportunities and salaries are increasing.
12) Information source: BCS (Bangladesh Computer Samity)
1 Introduction
17
Fig. 5: No. of IT professionals in various years
o
ç,ooo
1o,ooo
1ç,ooo
zo,ooo
zç,ooo
¸o,ooo
zooo zoo1 zooz zoo¸ zooµ zooç zoo6
ho. of professlonals
(Source: BCS)
According to BASIS, more than 300 local software companies employ about 5,500 soft-
ware professionals. In 2005 (during SOFTEXPO 2005), BASIS carried out a survey on
1,100 employees working in 55 companies. This section discusses the general fndings
from that survey. Section 2.0 (Labour force) includes other fndings (skill matrix, educa-
tional level etc.) of the same survey.
Table 4: Technical job distribution in software companies

Job type No. of respondents Per cent of total respondents
Network engineer 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%
Web developer 4,400 8%
(Source: BASIS survey. Number of professionals surveyed : 55,000)

Industry experts are of the opinion that the signifcant proportion of the jobs in the ‘non-
coding’ segments (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 ever used 80-20 rule for management and technical work in soft-
ware projects, the experts believe that with the increase in larger projects, the ‘non-code’
professionals in IT companies could establish their prominence more effectively and eff-
ciently.
The fact that non-technical people are more and more required in the IT industry, have
encouraged many of the new graduates from the universities to choose a career in IT
companies in areas of business development and customer services. However, the curricu-
lum in the universities for business graduates do not include any specialization in busi-
1 Introduction
18
ness and IT (IT Marketing, IT Sales etc.). Consequently, there is a gap between the aca-
demics and the people from the IT industry. However, trade associations with the help of
various industry development partners are in the process of bridging the gap between the
requirements from the industry and the output of a skilled workforce. In this process, the
biggest hurdle for the universities is the lack of impetus for the new students to decide on
the IT all along. In most cases, other industry segments absorb the business graduates for
their different operations. Moreover, as business and IT is still a relatively new feld, top
class business graduates are reluctant to engage themselves in the IT industry.
1.8 Related associations/governing bodies
• Ministry of Science and Information and Communication Technology (MOICT)
(http://www.mosict.gov.bd)
The former government established the MOICT. The reason behind this establishment
was to harness the potential of the IT industry and to channel government support for
the growth of the industry. Headed by a Minister, MOICT works as the hub to spread
IT around the country. The Ministry has set up an ICT incubator and is in the planning
process of creating a Hi-Tech Park in order to promote ICT related investments in the
private sector (from home and abroad).
• Export Promotion Bureau (EPB) (http://www.epb.gov.bd/index.html)
The EPB is a National Export Promotion Agency under the Ministry of Commerce. The
organisation is reorganized by the promulgation of a Presidential Ordinance in 1977 as a
semi autonomous body. The goal of the organisation is to promote export trade and
improve plan and policies helpful to the private sector. IT is administered by a Board of
Management (BOM) comprising members from both public and private sectors, the
honorable Minister for Commerce is the ex-offcio Chairman and the Vice-Chairman is
the chief executive of the Export Promotion Bureau.
• Bangladesh Computer Council (BCC) (http://www.bccbd.org)
The main objective of establishing BCC was to ensure the effective application and
expansion in the use of information technology. In view of this, BCC has been formulat-
ing appropriate policies and implementing them since its inception. BCC works in three
major service areas:
I. Advisory Services
II. IT- Based Training Courses
III. Initiation and implementation of Development Projects
• ICT Business Promotion Council (IBPC)
Public and private sector representatives related to the ICT sector have formed an ICT
Business Promotion Council. The Council is responsible for promoting ICT related serv-
ice and businesses in foreign as well as local markets. IBPC has already established a
shared offce in Silicon Valley in California, USA, for Bangladeshi ICT companies inter-
1 Introduction
19
ested in doing business in the US. Very soon, offces in Europe and other cities in the US
will be established.
• Board of Investment (BOI)(http://www.boi.gov.bd)
The Board of Investment (BOI) was established by the Investment Board Act of 1989 to
promote and facilitate investment in the private sector both from domestic and overseas
sources with a view to contribute to the socio-economic development of Bangladesh. It is
headed by the Prime Minister and is a part of the Prime Minister’s Offce. Its member-
ship includes representatives (at the highest level) of the relevant ministries – industry,
fnance, planning, textiles, et.al. – as well as others, such as the Governor of Bangladesh
Bank and heads of some business associations. The executive Chairman is the
Operational Head and CEO of BOI.
• Bangladesh Association of Software and Information Services (BASIS)
(http://www.basis.org.bd)
Bangladesh Association of Software and Information Services (BASIS) is the national
association for software and IT related services companies of Bangladesh. Formed in
1997, the association has been working with a vision of developing a vibrant local soft-
ware and IT service industry in the country. In light of this vision, BASIS has been
working hard to create IT awareness in the society through underlining the high impor-
tance of making the country more IT capable for a better future of the nation. At the
same time, the association has been working hard for creating an enabling environment
for the software and ITES industry of the country so that it can fourish by rightly utiliz-
ing the huge market potential – both at home and abroad.
A nine (9) member Board of Directors (elected by direct voting by the members for a
two-year term) runs BASIS. The Board of Directors has the overall responsibility for
running the affairs of BASIS and setting policy guidelines for its secretariat. Aside from
the elected board of directors, different sub-committees comprising of members deal
with different policy and development issues. BASIS has a strong secretariat headed by
the secretary. The secretariat is well staffed to deliver various member services and to
carry out programs and activities in the different areas as specifed within the broad goals
of the association.
• Bangladesh Computer Samity (BCS) (http://www.bcs-bd.org)
Bangladesh Computer Samity is the national association of the ICT companies (mostly
focusing on the hardware segment) in Bangladesh. BCS was established in 1987 with
eleven members.
The ICT industries of Bangladesh comprises distributors, dealers, resellers of computers
and allied products, locally assembled computer vendors, software developers and export-
ers, Internet service providers, ICT based educational institutions and training houses,
ICT embedded services providers etc.
1 Introduction
20
The total number of members comprises 524 at present. The body is run by a 7-number
executive council elected every two years.
• Internet Service Providers Association of Bangladesh (ISPAB)
(http://www.ispabd.org)
The Internet Service Providers Association of Bangladesh was established in 1998. The
general purpose of ISPAB is to improve business conditions of the Internet service pro-
viders operating in Bangladesh. It serves the common business interest of its members.
Their working areas include
- Promoting higher business standards
- Disseminating information
- Ensuring beneft for members (and their customers)
- Infuencing the government for pragmatic policies
- Performing functions that are customary among trade associations
- Cyber Café Owners’ Association of Bangladesh (CCOAB)
(http://www.ccoab-bd.org)
CCOAB is the trade association of the cyber café businesses at the national level.
Established in 2003, the association safeguards the rights and interests of the members
and helps the ICT in Bangladesh through combined strengths of the members.
1.9 Tax rules and other policies
13
• The government declared the ICT sector as a ‘Thrust Sector’
• A National ICT Task Force has been formed which is headed by the Honorable
Prime Minister. The task force made 45 suggestions for improvements; 25 have been
implemented by the government and further 9 are in the process of being imple-
mented
• A pragmatic National ICT Policy has been adopted (2002)
• The ‘Copy-write’ law is enacted
• The draft of the ICT Act has been approved by the Cabinet (it awaits the fnal
approval from the policy makers)
• The government have allocated minimum 2 per cent of ADP (Annual Development
Program) in IT spending (more than USD 53 million per year)
• The software business in Bangladesh enjoys full Income Tax Exemption
• ICT and ITES products/services enjoy Value Added Tax (VAT) Exemption
• Generally a 5-7 year tax holiday is provided to foreign direct investors and full
repatriation of invested capital, proft and dividend is available
• The government has exempted customs duties and VAT on computers, hardware and
accessories
• Now, Bangladesh is connected to the Information Super Highway (submarine cable
connectivity) through SEA-MEA-WE 4 consortium. The present VSAT backbone
would soon be replaced by high speed fber optic connection backbone
13) Sources: Board of Investment (http://www.boi.gov.bd/invest_incentive.php); BASIS (www.basis.org.bd);
National Board of Revenue (http://www.nbr-bd.org); http://www.itforchange.net/WSIS/dhaka .More on
ICT policy and government initiatives is available at http://www.itforchange.net/WSIS/dhaka/
1 Introduction
21
• The fxed and cellular telephone connections have shown signifcant growth in the
last few years
• An ICT incubator is established and an ICT park is in the pipeline
• Computer science as a course has been introduced at the High School level
• The Ministry of Science and ICT has introduced an ICT Internship Program in
cooperation with the private sector
• There are about 600 cyber cafés in the country with 250 of them in Dhaka
• People are showing encouraging awareness for Internet use. Increasingly, the young
generation is utilizing 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
Country IDD code 880
Dhaka city code 2
Working hours 9:00 am – 5:00 pm
(However, most private companies carry on till 6:30/7:00 pm)
Special working hours/days The software companies involved with outsourcing and
international projects accommodate the time difference with the
clients’ countries by customizing the working hours and
workdays
1.11 Political risks with the industry
The government of Bangladesh has declared the ICT sector as one of the major thrust
sectors. This has prompted suitable/encouraging government policies for the sector.
However, the sector is not immune to the general political risks. The country’s political
risks do not directly fall under the scope of this report and therefore, it is suggested to
consult other reports to learn about the general political risks associated with business. In
this regard, the ‘Doing Business’, published by World Bank could be very effective.
1 Introduction
22
2 Labour force
2.1 ICT education in Bangladesh
In recent years, the growing number of private universities has provided new and broader
opportunities for aspiring IT professionals to pursue relevant education. However, as the
IT orientation is not quite widespread in the lower/secondary education system, the
industry relies solely on the competencies the IT professionals obtain during their gradu-
ation/post graduation levels. Companies are stating that the students have a lot to learn
when they have graduated and as a result, special training and on the job training play a
vital role in developing the workforce in the software companies.
At present, most of the university level IT education is concentrated on computer science
and engineering courses
15
. According to a presentation
16
by Mr. Fahim Mashroor
Chowdhury, CEO, Bdjobs.com Limited, the industry demand for IT professionals per
year is about 2,800. The estimate is based on an assumption of a 50 per cent industry
growth and minimum 20 per cent attrition rate. Each year the number of IT graduates
from different universities is 2,000. However, about 50-70 per cent of the graduates
choose a non-software frm or go abroad. As a result, it is estimated that each year the
industry faces a net shortage of qualifed workers in the range of 1,800 to 2,600.
2.2 IT professionals skill matrix
The following tables show the academic qualifcations and the skill set of the IT profes-
sionals working in the software companies in Bangladesh.
17
The fndings are based on
the BASIS Survey 2005. The survey interviewed 1,100 employees working in 55 local IT
companies.
Table 5: Academic qualifcation of technical professionals
[% (respondent) of total technical staffs in the surveyed software frms]

Graduate in Non-IT 19% (209)
Masters in Non-IT 23% (253)
Computer science/engineering graduate (3/4 yrs.) 35% (385)
Masters in computer science/engineering 9% (99)
Diploma/certifcate courses in IT 12% (132)
Other 2% (22)
(Source: BASIS survey)
15) An overview of the IT course curricula is included in the appendix
16) Presentation made during a roundtable on ‘HR problems for software companies and possible solutions’
organised by BASIS on June/2005
17) Source: BASIS survey 2005
23
Table 6: Skill matrix of local software industry
[% (respondent) of total surveyed employees skilled in particular area]*
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) MS NT/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) Lotus notes 4% (44)
Cold fusion
4% (44)
*There are instances where the same respondent identifed multiple skill competencies
(Source: BASIS survey)
2.3 Availability of skilled labour
According to Mr. Chowdhury, the industry faces few specifc problems in availing ade-
quate IT professionals
18
. 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 HR policy in most software
companies
Absence of institutional infrastructure
for continued training
• Lack of ‘fnishing school’ 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 matter is
that the local software companies are seriously attempting to change the scenario. The
company chiefs and top management have admitted their diffculties, which is a good
sign in fnding a solution. BASIS members have already identifed specifc steps for
improving HR aspects of the software companies. Some of these are organisation spon-
sored training, induction of fnancial institutions, long-term internship and infuencing
18) Mr. Chowdhury is one of the BASIS directors and he has worked as the chairperson for the HR Sub-
Committee of BASIS. The problems he identifed were presented during a HR Roundtable among the
BASIS member representatives. The participating CEOs and MDs in that roundtable agreed with Mr.
Chowdhury while discussing the HR problems in IT companies in Bangladesh. In light of this, we can take
the following as the ‘overall’ industry wide view for Bangladesh ICT industry
2 Labour force
24
academia. Additionally, the inclusion of a higher number of international projects in the
industry has provided new impetus for professionals to seek opportunities.
2.4 Labour cost
There are three main categories of software companies that operate in Bangladesh; these
are locals, joint ventures (JV), and transnationals. The labour cost (salary range) varies
across the categories.
Following table displays the salary range of different categories of professionals working
in the software industry.
Table 7: Salary range of IT professionals in Bangladesh Companies
Salary range (USD) Local
19
JV
20
Transnational
21
Network engineer 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 are private universities. In terms
of technical education, Bangladesh University of Engineering and Technology (BUET) is
the leader. University of Dhaka (Computer Science and Engineering Department),
Shajalal University of Science and Technology (Sylhet) and Khulna University are also
producing good quality IT professionals. These public universities enjoy the ‘quality
intake’ advantage over other private universities. The difference in the intake is mainly
the result of the cost of education. The students in the higher education level in
Bangladesh mostly come from middle class families. The high cost of education at pri-
vate universities is still out of reach for most of them. Naturally, the government sup-
ported public universities become the obvious choice. In addition, the public universities
also provide better resources and environment (faculty, infrastructure etc.). The private
universities are new in the education system and most of them lack the basic require-
ments for university studies. Some of the private universities, however, in the recent times
(last 2-3 years) have done well in IT education.
19) Collected from a recent survey report by Mr. Mohammad Ashraful (the report is available at http://
geekswithblogs.net/joycsharp/articles/84330.aspx). Some fgures are collected through personal interviews
20) The fgures are collected through personal interviews
21) The fgures are collected through personal interviews
2 Labour force
25
The students pursuing IT education in the country have shown tremendous potential
over the years – winning international programming contests, developing effective anti-
virus software and many other such achievements are very common for Bangladeshi IT
students. In this regard, BUET and Dhaka University have been most successful. Among
the private universities, North South University, Ahsanullah University of Science and
Technology, American International University of Bangladesh, BRAC University,
Daffodil University and East West University are some of the leading institutions in IT
education.
The following table provides the web address for the leading universities in Bangladesh
for IT education.
Table 8: Leading Universities for IT education in Bangladesh
22
Bangladesh University of Engineering and
Technology (BUET)
www.buet.ac.bd
Islamic University of Technology (IUT) http://www.iutoic-dhaka.edu
Dhaka University (DU) http://www.univdhaka.edu
Khulna University of Engineering and Technology
(KUET)
http://www.kuet.ac.bd
Shajalal University of Science and Technology
(SUST)
http://www.sust.edu
North South University (NSU) http://www.northsouth.edu
Ahsanullah University of Science and Technology
(AUST)
www.aust.edu
American International University of Bangladesh
(AIUB)
http://www.aiub.edu
East West University (EWU) http://www.ewubd.edu
BRAC University (BU) http://www.bracuniversity.ac.bd
Daffodil International University (DIU) http://www.daffodilvarsity.edu.bd
In addition to the universities, there are number of Diploma/Vocational Institutions in
the country who provide IT education. There are 20 government and 87 private poly-
technic institutes in the country. These institutions mainly offer diploma courses on
engineering subjects. Most of these centers are owned and administered by the govern-
ment through the Technical Education Directorate.
An unauthenticated source reveals that there are more than 1000 private and public sec-
tor computer-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 facilities in Bangladesh for the ICT industry are inadequate. Especially, the
types of training provided are not in line with the industry requirements. Most of the
training institutions provide training in basic computer skills. Few specifc institutions
(NIIT, Aptech, Base etc.) provide advanced level of training courses. However, they lack
the relevance to the actual needs of the software companies. Professionals have the option
to acquire certifcations by Microsoft Certifed Partners.
22) Source: Personal interview
2 Labour force
26
To overcome the defciency of the institutional training facilities, almost all companies
develop in-house training programs. Moreover, they strongly recommended foreign com-
panies coming to Bangladesh to do the same.
2 Labour force
27
3 Infrastructure
3.1 Internet bandwidth availability
Bangladesh has joined the Information Super Highway through submarine connectivity
in 2006. Bangladesh Telegraph and Telephone Board (BTTB) is the offcial custodian of
the new connectivity backbone. The BTTB authority has recently publicized a utilization
plan of the submarine connectivity. The following sections provide a summary of the
plan and the upcoming Internet connectivity scenario of the country.
Bangladesh connects itself to the submarine cable connectivity through the SEA-MEA-
WE-4 consortium. Available capacity for BTTB in this cable is 468,000 MIU* Km
which may have a maximum of 64 STM-1 (10 Gbps) at the landing station. MIU is
Minimum investment Unit that is equivalent to one STM-1. Out of BTTB’s total capac-
ity, 50,000 MIU* Km has already been contributed to the common pool of the consor-
tium for sale. The BTTB further plans to enhance the capacity of the cable in different
phases with minimal investment. Minimum capacity unit for this cable is STM-1 i.e.
BTTB has to utilize the capacity at STM-1 or multiple of that between any two landing
stations.
Although the connection to the Submarine Cable Super Highway presents tremendous
improvement opportunities for Bangladesh, the present situation in terms of Internet
connectivity is not at all satisfactory. The present VSAT backbone connectivity is slower
in nature and is prone to technical diffculties. The new Submarine backbone on the
other hand, still has to be streamlined.
3.2 Bandwidth cost
The BTTB Internet connection sets the tone for the trend in connectivity. The full
ranges of bandwidth/Internet connection costs are available at the BTTB’s website
(http://www.bttb.net). The following sections describe the general cost of getting an
Internet connection.
28
Table 9: LOW COST Internet connectivity for corporate users
23
Type of
connection*
Average
bandwidth
Backbone Initial charge**
(USD)
Monthly
Charge (USD)
Technical support
64 kbps
(shared – 2)
70%
(of 64 kbps)
(Fiber optic)
Submarine
Cable
Connectivity –
100%
VSAT – 25%
(as emergency
back-up)
380 170 1. Connection
within 7 days of
work order.
2. Connection
problem – Instantly
within Dhaka
• 9 am – 8 pm; at the
site
• 8 pm – 9 am; over
the phone.
3. Backbone problem
– within 2 hours.

64 kbps
(dedicated)
100 %
(of 64 kbps)
320
Table 10: HIGH COST Internet connectivity for corporate users
24

Type of
connection*
Average
bandwidth
Backbone Initial charge**
(USD)
Monthly
Charge (USD)
Technical support
64 kbps
dedicated
(with VSAT
support)
64 kbps
dedicated
(without VSAT
support)
100%
(of 64 kbps)
100%
(of 64 kbps)
(Fiber optic)
Submarine
Cable
Connectivity –
100%
VSAT – 25%
(as emergency
back-up)
(Fiber optic)
Submarine
Cable
Connectivity –
100%
460
460
300
210
1. Connection within
7 days (max.) from
work order.
2. Connection
problem – Instantly
1 hour (max.)
within Dhaka.
Automated
monitoring system
with 24/7 on site
technical support
(assistance within
15 minutes).
Redundancy support
with 4 VSAT
3. Backbone problem
– within 5 minutes
Average connectivity cost per month for 1 kbps = 2.67 USD
25
* The client could opt for ‘Higher Bandwidth’ as well. However, according to Internet Service
Providers, for typical usage 64 kbps is adequate
** The charge may vary according to location of the installation
23) Source: R-net Online (www.rnet-online.net)
24) Source: Bangladesh Online Limited (www.bol-online.com)
25) Source: Agni Systems Limited (http://www.agni.com)
3 Infrastructure
29
3.3 Electricity and power stability
The problem with electricity is one of the major hurdles the software companies in
Bangladesh face. Through the ICT incubator
26,
there are special arrangements for an
uninterrupted power line, but the other companies with offces all around the city must
arrange for alternative power sources. In this regard, most companies opt for an electric
generator for supporting the larger electricity requirement. They use UPS (Uninterrupted
Power Supply) and IPS (Instant Power Supply) for equipments and computer systems.
The generators and UPS/IPS are widely available in the market and are quite reasonable
in price. When asked to comment the cost addition to production due to this alternate
electricity support, one CEO of a local company said that the problem has been prevail-
ing for last 2-3 years and in recent times it has deteriorated further. He does not see
immediate improvement in country’s power sector. He strongly suggested on arranging
for an alternate power source for any new ventures. However, he said that the additional
cost is very insignifcant for his company and it increases the cost by about 0.5 per cent.
Most if not all IT joint ventures have assured that there is a power generator.
26) ICT Incubator: Government supported infrastructure (foor space, utility, net connection etc.)
facilities for small IT entrepreneurs
3 Infrastructure
30
4 Hardware and technical back-up
4.1 Overall hardware market
The PC/Server market in Bangladesh is estimated at USD 129.4 million (2005).
Springboard, a Singapore based Research Company revealed this in one of their recent
research reports
27
. The report also said that the market growth rate in the frst quarter of
2006 (Jan-Mar) was 23.8 per cent as compared to the frst quarter of preceding year. The
laptop market expanded 24.0 per cent in 2005.
During Q4 2005, 48,340 PCs were shipped from international locations to end-users in
Bangladesh for a value of USD 37.7 million, up from 34,884 units in Q3 2005. For the
full year (Jan-Dec), the PC shipments expanded 16.4 per cent to 162,400, generating a
value of USD 129.4 million. Aggressive sales and marketing activities undertaken by
MNCs have helped increase PC market growth.
The large enterprises (companies with more than 500 employees) and government sectors
collectively accounted for almost half of total PC/server shipments in 2005. NGOs are
also an important source of funding for IT investment in the country, but generally,
spending is routed through the public sector. In the private enterprise market, banks and
telecom companies are largest on IT spending. The consumer and SME markets repre-
sent signifcant long-term promise, but both segments are currently in the infancy stage.
4.2 Servers/workstation availability
Locally assembled, often un-branded, machines continue to dominate the market, hold-
ing over 75 per cent of the PC shipment market shares. Most of the international giants
also operate in the local market. In cases of brand equipment, the international giants
usually rely on local distributors and dealers. IBM, HP and Dell all have local distribu-
tors in the country.
4.3 Servers/workstation price
The cost of a server/workstation varies with the confguration. The following table shows
the cost of server/workstation with basic confguration.
27) www.springboardresearch.com
31
Table 11: Price (in USD) of server/workstation with basic confguration
28
Clone IBM HP Dell
Server (Basic Confg.) 1,800 – 2,000 4,800 – 5,000 5,700 – 6,000 6,000 – 6,500
Workstation (with OS*) 680 – 760 900 – 1,000 850 – 1,000 900 – 1,000
Workstation (without OS) 530 – 600 760 – 900 680 – 830 760 – 900
*OS – Operating System
4.4 Availability of technical support
The position of the technical support for PC/server hardware troubleshooting is at a
satisfactory level. The vendors have enough technical knowledge to provide after sales
support to their clients. Most large organisations
29
usually have an Annual Maintenance
Contract (AMC) with the vendors. The AMC is customizable in accordance to the
client’s needs. In some instances, the larger users prefer having their own technical
support team; however, the general support from the vendors is adequate for smaller
organisations.
The interviews with local hardware vendors revealed an interesting aspect regarding the
after sales support. They opined that, the local agreement of maintenance is much more
effective than a international warranty agreement. Though, as agents of the international
giants, the designated local distributors are legally bound to take in the complaints from
the customer, however, they may not necessarily be bound to take the responsibility of
providing the technical support by themselves. They usually communicate with the
regional offce and hand over the responsibility to them. In case of a local agreement, the
vendors would provide the support locally by using their own resources. In the latter case
the support is more prompt and could be extended even to 24/7 support.
4.5 Major hardware companies’ presence
Among international vendors, HP led the market with a 7.6 per cent share of the ship-
ments in 2005, followed by Dell and Lenovo/IBM. A local brand, increasingly viewed as
a viable alternative to international players, is Daffodil Computers (http://www.daffodil-
bd.com), which made several strategic announcements in the fourth quarter of the year.

28) Source: Flora Limited (www.foralimited.com), Rishit Computers Ltd. (www.rishit.com)
29) Source: personal interview/experiences (Large Organisation – MNCs, Local Corporate)
4 Hardware and technical back-up
32
5 Key competencies in Bangladesh’s ICT sector
5.1 Key industry competencies
According to the industry stakeholders/experts, the major competencies (or comparative
advantages) for ICT industry in Bangladesh are as follow:
Cheap labour
Bangladesh has one of the cheapest rates for work force among the similar business desti-
nation countries. Concerning the ICT industry, the highly skilled labour force comes at a
signifcantly competitive price. In addition to that, the IT professionals in Bangladesh are
very good at absorbing new learning (easily trainable).
Another great advantage with the Bangladeshi work force is their longer-term commit-
ment to specifc work areas. However, despite their commitment to their work areas, they
are not always necessarily committed to their organisations.
The reason for the persistence with a specifc work area could be related to the fact that
the people working in the ICT industry in Bangladesh are not offered endless opportuni-
ties (as is the case for many of the neighbouring countries). Therefore, IT professionals
build their skills in a particular area. As a result, clusters of experts with different skill
sets are available in Bangladesh. However, most companies need to customize their HR
policies to support a long-term commitment of the work force.
Quick learning/easily trainable
The Bangladeshi work force as well as the business people are traditionally renowned for
their quick learning abilities. The work force, especially, has historically strong abilities in
mathematical and logical analysis processes. Bangladeshi students have won a number of
programming and mathematical competitions globally. Because of their capability to
quick learning, the Bangladeshi work force can easily be trained to acquire specifc tech-
nical knowledge.
Geographical location
Geographically, Bangladesh has the potential to become a business hub. Naturally, utili-
zation of this advantage would result in growth in all industries. Furthermore, as ‘non-
nuclear’ country, Bangladesh has added advantage for countries that have restrictions in
collaborating with ‘nuclear’ countries.
33
Changed scenario in neighbouring countries
India is no doubt the leader in South Asia when it comes to outsourcing and IT as a
whole and India is a pioneer. However, in recent times India has moved up in the ladder
and is now operating in higher and more complicated levels of IT. In addition, salaries in
India have increased. This creates a vacant position for an outsourcing partner who can
operate at the lower strata of outsourcing. As a result, Bangladesh gains an edge on this
segment of market.
Favorable government policies
As was explained above (please see section 1.9), the government of Bangladesh has
declared the ICT sector as one of the major ‘thrust’ sectors. Added to special policy bene-
fts for the ICT sector, the favorable investment policies for FDI should encourage com-
panies from other nations to venture into the Bangladesh ICT industry.
Availability of fnancially capable investors
Local business investors in Bangladesh are well equipped to invest in strategic alliances and
partnerships. The willingness of the investors combined with their local business know-
ledge could be utilized for better return on the investment. Another aspect of these local
investors is that they have proven records of accomplishment in international businesses in
other sectors such as textile. These people have funds and are ready to invest money in new
industries. As a result, the foreign investors feel comfortable working with them. However,
in this regard, the local investors have more or less never favored the IT investment, as intel-
lectual investment in IT businesses sometimes make the return ‘invisible’.
English profciency
Bangladeshi people have higher competencies in English compared to countries like
China and Vietnam. However, the language profciency is to some extent skewed
towards professionals with better schooling. In general, the English skills need to be
improved for Bangladeshi IT professionals to be able to compete in the global market.
New outsourcing destination
Bangladesh is relatively new as an outsourcing destination. This means many unexplored
areas of business. More and more investments are coming in and the industry is experi-
encing growth. The attractive business prospects are bound to encourage local and inter-
national investors in the near future.
5.2 Software application competencies
In response to the question regarding the specifc software application competencies for
Bangladesh ICT industry, the respondents of the interviews were of the opinion that
Bangladesh is not yet ready for complex outsourcing support. They think that any for-
5 Key competencies in Bangladesh’s ICT sector
34
eign company intending to enter Bangladesh IT sector, should start with small projects
such as web development, desktop publishing, data entry, 3D animation and back offce
development. For venturing into more critical software solutions such as ERP and CRM,
the proper resources need to be built gradually. However, all the respondents were very
optimistic about the potential of ICT in Bangladesh.
Software application Present competencies Potential competencies
Programming **** *******
Hardware assembling ******* *********
Desktop design, publishing ***** ********
ERP (Enterprise Resource Planning) ** ***
CRM (Customer Relationship Management) * ***
CMS (Content Management System) * *****
EDI (Electronic Data Exchange) *** ******
Drawing and model construction * ***
Data safety * **
Mobile content development ****** *********
Call centers * ******
ASP (Application Service Provider) ** ***
Data base development  * ****
Game Development *** *****
E-governance ** *******
The rating system presented above is based on the opinions of the interviewed compa-
nies. It mainly asserts the attractiveness of different segments of software development.
In assessing the present competencies, the considerable factors were
• Market awareness
• Extent of use
• Availability of workforce
• Number of companies working in specifc areas
• Competitive advantages over other countries
The considerable factors for the potential competencies were similar to the present com-
petencies with the exception in case of potential, where the perception of the stakeholders
was emphasized.
5 Key competencies in Bangladesh’s ICT sector
35
6 Local market opportunities and threats
6.1 Specifc market segments
The prevailing opportunities within the ICT industry in Bangladesh are as follows.
Readily available
The top most readily available segment is the outsourcing segment. Bangladesh has come
a long way in recent years to attract an increasing number of outsourcing projects. Major
countries that are outsourcing IT projects to Bangladesh include USA, UK, Canada and
Denmark. Knowledge and learning from the Business-to-Business (B2B) Programme
could be a good indicator. The B2B Programme has as many as 42 projects running in
Bangladesh at this moment. Of these, 11 are software development (outsourcing)
projects
30
.
The specifc sub-segments within outsourcing are more ready than the others, they
include Web Development, Back Offce, Data Entry, Animation and Multimedia and
Desktop Publications.
Potential/upcoming
The telecom sector in Bangladesh is rising at great pace. The number of mobile phone
users in Bangladesh has crossed 15.50 million in August 2006 with GrameenPhone as
the leading operator
31
. An encouraging fact about the mobile phone usage is Bangladesh
is that it is not restricted to the urban areas only; rather it is wide-spread throughout the
country. The booming mobile communication has provided new business opportunities
for software companies. The concentration of these opportunities at present lies within
value added services. However, the assurance of local support would defnitely infuence
the major telecom companies to procure their operational software from local market
A similar segment that came right after the telecom boom is mobile content development
opportunities. Many of the local companies are capable of providing support to the local
and international telecom companies.
The government commitments/initiatives towards e-governance have provided a very
important opportunity for the software companies. Additionally, the ICT4D proposi-
tions – though not directly designed with a business focus – would result in new business
opportunities for IT companies.
30) Source: http://www.psdbangladesh.com
31) Source: Bangladesh Telecommunications Regulatory Commission (BTRC)
36
Niche
The SME sector in Bangladesh is growing at a steady rate. The use of IT for the SMEs is
not wide spread. However, the potential remains. A survey report
32
on the SME segment
in Bangladesh revealed that there exists a demand for IT/ITES estimated to the value of
USD 17.94 million. The demand is expected to rise at a rate similar to the SME sector
growth rate. The demand for software includes accounting, billing, productivity and
inventory management.
6.2 Micro level
Regarding the individual IT companies in Bangladesh, the most diffcult aspects at
present are: disloyalty of employees in the IT business, recruitment (on a medium to long
term basis), access to bank fnance and lack of business vision of the entrepreneurs.
Bangladeshis are used to short term proft from investing in the textile business. Many of
the investors who come from this sector are also expecting short term proft in the IT
business. The management style in Bangladesh is to a large extent based on a top-down
approach. Apart from clashing directly with the Danish/Scandinavian style i.e. each per-
son has the responsibility for his/her own job – it also means that Bangladesh is short of
middle management skills. There is not one large company (like in India, for instance) to
operate as an example and drive the development of the IT business. During the inter-
views, the stakeholders reiterated these facts and opined that the aforementioned diffcul-
ties could become even larger threat in the future (unless proper steps are taken).
Based on the experience of Danish companies, it takes long time to establish a company
legally in Bangladesh. The process of obtaining licenses, approvals etc. has a duration of
up till six months. This factor infuences the ease with which new ICT companies are
established, and it can decrease the speed and number of companies in the development
of the ICT sector.
As well, the cost and the quality of Internet connections infuence this development. The
costs of Internet access are relatively high, and even at high costs no optimal connection is
yet available. The quality of Internet connections will affect especially the international
possibilities for the sector, as effective communication overseas is somewhat constrained.
6.3 Macro level
The interviews with different stakeholders revealed that the following industry wide
threats might affect the ICT industry in the future.
• Labour constraints: Most stakeholders perceive the quality labour constraint as the
most threatening aspect to the Bangladesh ICT industry. The vicious cycle of a less
attractive career path in IT and the less developed sector due to lack of resources
could deeply affect the sector. Especially, the quality of the Bangladesh IT profession-
als is deteriorating all the time.
32) ‘BASIS-KATALYST IT/ITES Study’ (2005) – jointly conducted by BASIS (www.basis.org.bd)
and KATALYST (www.katalystbd.com)
6 Local market opportunities & threats
37
• Lack of interest: The universities are faced with a problem of declining number of
students for IT courses. Even the business graduates are not willing to work for IT
companies. In most cases, the other industry segments absorb the business graduates
for their different operations. Moreover, as the Business IT is still a relatively new
feld, top class business graduates are reluctant to engage themselves in the IT indus-
try.
• Brain drain: Brain drain further worsens the labour constraints. A talented group of
IT graduates is leaving the country to pursue higher and better education and most of
them do not return.
6.4 International
The international threats from the neighboring countries (especially India) have always
been present. Recently, the business threats coming from India has changed. India is
going into an upper segment of the outsourcing/IT support market, which has created an
even feld for the second category countries. In this regard, countries like Vietnam and
China could become large threats for the Bangladesh IT industry.
6 Local market opportunities & threats
38
7 SWOT

Strengths
According to the literature research and the opinion of the stakeholders, the Danish com-
panies (especially the IT companies) could bring in some specifc strengths that will lead
to success of their venture in the ICT industry in Bangladesh. They are as follows.
• Business vision: Most of the IT companies in Bangladesh severely lack the broader
business vision. The usual trend was/is to start up an IT company, then look for
opportunities and expect a fast proft. The IT sector does not enjoy the proper busi-
ness planning as does the other sectors in the country. This is where the Danish com-
panies can bring new knowledge. The management and business professionalism of
the Danish companies is expected to encourage the potential/existing investors from
Bangladesh to venture into IT. The Danes could make the investors understand that
a long-term view is required and help them see the world of opportunities.
• Cultural bridge: Knowledge of the outsourcing country’s culture could be of great
help. Especially, the trade and investment routines of the particular country would
provide direction for the strategic partnering companies to serve the specifc market.
One of the interviewed stakeholders expanded on this point by specifcally saying
that the Danish companies could utilize their ‘Nordic Way’ to good effect.
• Business linkage: Danish companies could use their networks in EU region to secure
outsourcing projects and utilize the competencies of the Bangladesh ICT to deliver.
• Danish government’s presence: Danish government has been involved in the develop-
ment process of Bangladesh. Bangladesh and Denmark enjoy a good relationship.
The Danish IT companies could use their government’s good relationship to enter
into public service IT projects in Bangladesh.
• The existing presence of a good record of Danish-Bangladeshi IT projects: Danish
companies have already made some progress in entering the Bangladesh ICT indus-
try. Through the B2B programme and private initiatives, many Denmark-Bangladesh
Joint Venture IT projects are operational at present. The experiences of these projects
would be helpful for planning new business projects in this sector.
Weaknesses
• HR policy: The Danish companies have to be very careful in trying to implement the
HR policy that works in Danish region. The employee force in Bangladesh has dif-
ferent value sets and that has to be addressed while venturing into the local market.
The Danish companies intending to come to Bangladesh should prepare themselves
to cope with the complexity of culture in Bangladesh and to some extent be less naïve
in their approach.
• Local business knowledge: The stakeholders in the Bangladesh ICT industry opined
that foreign companies (especially the Danish companies) trying to come to
Bangladesh should spend a signifcant amount of time on pre-planning. The differ-
ences in cultural values, unless addressed properly, could have serious negative conse-
quences. For instance, the lengthy bureaucratic system in Bangladesh is almost an
integral part of business. People have to fnd their ways around these systems and
cope with them. The best way to deal with these diffculties is to take in local people
39
on board. Another option could be to outsource the bureaucratic procedures of
‘Doing Business in Bangladesh’.
• Conservative approach: Some informants said that sometimes the very cautious
approach of the Danish companies frustrates the ambitious local partners.
• Communication: The business communication of the Danish companies sometimes
causes misunderstanding, as pointed out by a local IT company CEO. He said the
problem is not very signifcant now. However, he is of the opinion that when increas-
ingly more interactions take place in the future, a common communication system
would become necessary.
• Conservative vs. expressive communication: Bangladeshi are very polite and do not
always express their opinion i.e. Danish business people would always get the reaction
they expect, misunderstand, and think that everything is in order when it is not. On
the other hand Danes are very straightforward, impatient (for example when it comes
to reaching a decision or to get an answer) and not always very polite in their com-
munication. The two cultures are surely clashing regarding the issue of communica-
tion and this is something both parts have to recognize and try to overcome.
Immediate opportunities
• Horizontal market expansion through outsourcing
Outsourcing to Bangladesh gives the Danish companies a defnitive competitive advan-
tage in terms of lower costs for products and services. They could utilize this advantage
in expanding into new market segments in (and outside) Denmark.
• New market entrance
The cost savings and new revenue fows gives the opportunities to venture into new mar-
kets and different segments.
• Training needs
By adding a new service to their portfolio, the Danish companies could capitalize
through addressing the need for training in Bangladesh. The advanced technology as
well as business training by the Danish companies would also result in attracting the
right people for right job for Danish companies interested to operate from within the
Bangladeshi ICT industry (in order to gain competitive advantages).
Long term opportunities
• Asian market penetration
The geographical location of Bangladesh provides a great platform for operating in Asian
markets.
• Niche market penetration
The SME sector in Bangladesh has a great demand for IT services. The untapped market
could through extensive awareness and marketing drive become a lucrative niche segment
7 SWOT
40
for Danish IT companies. The successes of this niche would provide a platform to enter
the neighboring countries where the market size is many times larger than that of
Bangladesh. In this regard, strategic alliances with support organisations (e.g. fnancial
institutions) could be helpful.
• Market capturing
The Danish companies could go for an ambitious plan of challenging the Indian giants
in capturing markets in other countries. The starting point in this process could realisti-
cally be to take on some of the work, which is now too expensive to outsource to India.
The tools for success in this regard would be the immediate development of competen-
cies in the Bangladesh ICT sector.
Hurdles
• Training requirements
The labour market in Bangladesh is cheap. However, there is a signifcant need to train
the existing labour. Generally, the training areas include areas of advanced technology,
business acumen and middle management skills. One positive aspect in this regard is
that the labour force in Bangladesh is easily trainable.
• Lack of methodical approach
In general, Bangladesh companies and people lack documentation skills and systematic
work process skills. The continuity of work could be lost due to this. Especially, many of
the companies face diffculties in times of employee turnover. Another impact of the lack
of methodical approach is diffculties in quality control.
• Language barriers
Bangladeshi labour force in general lacks English language profciency. In specifc areas,
the presentation and correspondence skills of the local labour force has room for
improvements.
• Lack of information
The information sources in Bangladesh are scattered and it can sometimes be diffcult to
get specifc information. Usually, people use their personal network to get information.
Some government agencies do provide related information. However, the overall research-
based/authentic information sources are not adequate.
7 SWOT
41
Appendix A
Abbreviations and web references
List of abbreviations
BASIS Bangladesh Association of Software and Information Services
BCC Bangladesh Computer Council
BCS Bangladesh Computer Samity
BoI Board of Investment
BRTA Bangladesh Rural Telecom Authority
B2B Business-to-Business
BTRC Bangladesh Telecom Regulatory Commission
BTTB Bangladesh Telegraph and Telephone Board
CCOAB Cyber Café Owners’ Association of Bangladesh
EPB Export Promotion Bureau
FDI Foreign Direct Investment
IBPC ICT Business Promotion Council
ISP Internet Service Provider
ISPAB Internet Service Providers Association of Bangladesh
ITES IT Enabled Services
ITU International Telecom Union
JV Joint Venture
MNC Multi National Companies
MOICT Ministry of Science and Information and Communication Technology
NBR National Board of Revenue
SICT Support to ICT (task force)
SME Small and Medium Enterprises
USD United States Dollar (For this report the currency exchange rate
is taken as 1 USD = 66 BDT – Bangladeshi Taka)
VAS Value Added Services
VAT Value Added Tax
Appendices
42
Reference web sites
BCS www.bcs-bd.org
BTRC www.btrc.org.bd
ITU www.itu.int
BTTB www.bttb.net)
Doing Business (World Bank) www.doingbusiness.org
BASIS www.basis.org.bd
World Bank www.worldbank.org
Springboard Research www.springboardresearch.com
MOICT www.mosict.gov.bd
EPB www.epb.gov.bd
BCC www.bccbd.org
BoI www.boi.gov.bd;
www.boi.gov.bd/invest_incentive.php
ISPAB www.ispabd.org
CCOAB www.ccoab-bd.org
NBR www.nbr-bd.org
Daffodil University www.daffodilvarsity.edu.bd
BRAC University www.bracuniversity.ac.bd
Bangladesh Online Limited (BOL) www.bol-online.com
R-net Online www.rnet-online.net
Agni Systems Limited www.agni.com
Flora Limited www.foralimited.com
Rishit Computers Ltd. www.rishit.com
Danida PSD www.psdbangladesh.com
KATALYST www.katalystbd.com
Ministry of Education www.moedu.gov.bd
Somewhere in...… www.somewherein.net
DataSoft Systems Bangladesh Limited www.datasoft-bd.com
Bdjobs.com Ltd. www.bdjobs.com
eGerneation Limited www.egeneration.com.bd
The Decode Ltd. www.decodebd.com
Southtech Limited www.southtechlimited.com
Spinnovation Limited www.spinnovation.com.bd
WSIS (World Summit on www.wsis-online.net;
the Information Society) www.itforchange.net/WSIS/dhaka
TRADO www.trado.org;
(IT Trade Opportunity) www.trado.org/Cou/BD/CouBDIts.aspx
Bangladesh Development Gateway www.bangladeshgateway.org

Appendices
43
Appendix B
Case study
Nordic-Bangladesh joint venture
To following is a case study of a Nordic-Bangladesh joint venture in Bangladesh ICT
market.
Somewhere in...… (www.somewherein.net) – An outsourcing success story
• Background
With the motto ‘offshore web solutions – the Nordic way’, Somewhere in...… has been
operating within the Bangladesh ICT industry as one of the best outsourcing companies
(as claimed by Somewhere in management) for the Nordic region. The major working
partnership of Somewhere in...… is with Norway though they have also commenced
exporting to other Nordic countries. The strongest competency of the company lies in its
in depth knowledge of the two different regions (viz. Nordic and Bangladesh). The
Norwegian Mr. Arild Klokkerhaug, Head of Opportunities, Somewhere in…has been
living in Bangladesh for more than 12 years. He along with his two partners brings with
them the Nordic culture and blends them effectively with the local culture. That is the
secret of the success behind the company. Let us now look in detail at the road to success
for ‘Somewhere in...…’.
• Challenges
Before the partnership began, the company identifed the challenges that lay ahead.
Three basic roadblocks were as follows:
i. Establishment
After identifying the rough business idea based on their ICT skills, cultural bridging
expertise and mission in life, the founders went into a month of self-analysis and observa-
tion. Their thinking process was “We had to know and understand ourselves, our iden-
tity and values before starting a business, or else how can we design the foundation?
They came down to the core values of inclusiveness, imagination, curiosity and engage-
ment, and all talents we employ, all projects we take on and all partners we work with
must be recognized for these values. People can learn java, they can learn French, but
unless curiosity is in their nature, it is hard to learn.” By religiously applying these values
along with their business purpose of creating colorful moments, Somewhere in… has a
clear direction for growth.”
Every country presents itself with some unique diffculties in business establishment and
Bangladesh is no different. The business culture in Bangladesh can sometimes be very
‘unprofessional’ and the lack of commitment is one of the major hurdles for intending
investors. The legal procedures can also be very tedious owing to deep-rooted bureauc-
racy. However, the IT sector in Bangladesh (and foreign investment in general) enjoys
44
favorable policies and encouragement, still, the procedures and documentations can eas-
ily frustrate people. “Therefore, to ensure focus on the core business, Somewhere in…
outsourced the registration and accounting process to a well-reputed, professional frm”.
ii. Human resources
Somewhere in... at the very beginning identifed the people as the most crucial resource.
To be successful working for the Nordic market, the founders realized that they had to
get only BoB; “Best of Bangladesh” working for them and to get the BoBs to join, they
needed to make Somewhere in… a magnet for the best talents. Here the Nordic Way
proved effective; establishing freedom with responsibility, leading by values, appreciating
and encouraging participation and giving every talent a chance to build up a small own-
ership in the company.
In addition to people, ensuring physical infrastructure such as connectivity, hardware,
offce etc. was also quite formidable challenge for Somewhere in... “Insisting on fast
Internet connection, we pay twice as much to the ISP as for house-rent and electricity”.
iii. Business development
You could have all the ingredients of the successful company, but if you do not have the
business you do not survive. This simple rule we all know, but we really comprehend the
implications of this rule when we start the venture. Mr. Klokkerhaug appreciated this
fact and took up the challenge from the very beginning.
• Strengths
In overcoming the challenges, Somewhere in... identifed their relevant strengths as fol-
lows.
i. Local knowledge: Mr. Klokkerhaug has been living in Bangladesh for over 12 years.
He knows the culture and people and has a vast network of business relations. This is
one of his most critical success factors.
ii. Nordic background: The top management’s Nordic background and values has been
the best foundation for successful business development of the company.
iii. ICT industry knowledge: Finally, with all founders having long managerial careers in
the local ICT business gave them required business confdence and understanding of
opportunities.
• Strategies
While addressing different challenges, Mr. Klokkerhaug and other partners set specifc
strategies to follow. The methodical approach was evident in the fact that they took 1½
year in planning and initiating their business.
First, they addressed the legal process. Discussion with top management of Somewhere
in... revealed that their strategy in this regard was to ride with the system. They were so
successful that they now believe that the bureaucratic hurdles are not in fact a major
block if proper strategies are followed. They took similar approach to ensuring infrastruc-
Appendices
45
ture. However, in the latter case they took a liberal fnancial strategy. Their argument
was that they would compromise on cost competencies for the shorter term to leverage
the foundation in the longer term.
The most diffcult of the challenges, according to Somewhere in... management was fnd-
ing the work force. They were not worried too much about the management competen-
cies, as both Mr. Klokkerhaug and his partner were capable and effcient in that regard.
However, the largest worry was to get the right people for getting the job done. In this
regard, their creativity prompted them to redefne their HR policy. They challenged
many of the traditional practices of HR in Bangladesh (as well as in many other coun-
tries). They designed a comprehensive recruitment and evaluation system where the
employees’ are not treated as employee, rather they are treated as minipreneurs’ and busi-
ness partners. One example in this regard is the different designation for the operational
positions. Rather than using the traditional ‘business development’, they use ‘opportuni-
ties’ and the people working in Somewhere in... are treated as ‘talents’. In addition to
ensuring ‘belongingness’, Somewhere in... also ensures proper recognition and compensa-
tion for its talents with a combination of low basic pay, large potential team bonus (not
individual) and company shares.
Final hurdle to overcome was to ensure successful business fow. The strategy the com-
pany followed was to maintain tight focus on the market they wanted to serve. Naturally,
with Nordic connections and understanding, they only serve that region and rejects
offers from elsewhere. In that regard, Mr. Klokkerhaug and his other Norwegian part-
ners provided the bridge between the two regions and created a ‘comfort zone’ for the
Nordic companies to outsource their projects. In their own words, Somewhere in... peo-
ple assure the Nordic companies in the following manner.
Cost-effciency: invest in us as your offshore development centre to buffer against market
demand fuctuations.
Synergies: get a virtual in-house department up running without sending key personnel
and hard-earned cash to the unknown or why not rent on-demand programmers when-
ever you need?
Focus go from good to great and deal in confdence with like-minded people and culture.
• Success
The success of Somewhere in... is best described as the leading offshore partner from
operating in Bangladesh for Nordic companies. Success brings success. Somewhere in... is
now in a process of launching one of the largest strategic alliances in the Bangladesh IT
sector.
Appendices
46
Appendix C
Interviewed companies
Spinnovation Limited (www.spinnovation.com.bd)
Spinnovation, an ICT Solutions and Services Company, was launched with the objective
of developing domain capabilities in identifed verticals, such as Business Services,
Manufacturing, Distribution, Healthcare, Banking and Financial Services etc. and to
provide value-added consulting solutions and ICT services to leading players in the glo-
bal arena, using the onsite-offshore model of outsourcing.
In order to gain a frm footing in its chosen niche, the company is constantly engineering
its process architecture to bring up its customer relationships to a knowledge-alliance
model that would lead to co-development of industry components and reusable code in
the customers’ respective domains, without compromising the fexibility of vanilla serv-
ices offerings from an offshore perspective while implementing the work and cultural
practices of the client.
Rather than size, Spinnovation looks at knowledge as a scalable resource and is commit-
ted to quickly respond to customers’ business needs with alacrity and creativity.
Acknowledging that price performance is key to its customers’ competitiveness,
Spinnovation is committed to make a difference to its customers’ ROI by effectively lev-
eraging local talent and passing on the cost benefts that the region offers.
The execution and support engine at Spinnovation is powered by a team of experienced
and talented software professionals, carrying vendor certifcation from Microsoft, Lotus,
IBM, and ORACLE.
Somewhere in net ltd. (www.somewherein.net)
Somewhere in... is a Norwegian (80 per cent) Bangladeshi (20 per cent) joint venture
company that has set out on a journey to make a global solution for local communities.
We started in Bangladesh, a country lacking good web and mobile value added services,
but with a huge and fast growing domestic market.
We have 30 talents working with us as of mid July 06, and have a fast growth rate. Of
these, seven programmers are dedicated for our research and development of mobile solu-
tions for Bangladesh. We are located in Gulshan just fve minutes away from all major
telephone operators.
Our management consists of Arild, Espen, Arve, Jana and Misho, the frst three
Norwegian, with the frst four with long experience from the telecom sector in
Bangladesh and Norwegian content providers and the latter being a top programming
personality in Bangladesh.
We do have a normal cp agreement with Grameenphone and are from July launching
commercial content services under our own brand. We aim at having cp agreement with
Appendices
47
the four major operators by the end of this year. We are also the strategic partner
with the following companies (Digitania – Hungary, Digitania – Norway, Wavenet –
Sri Lanka, Starlife – Russia, Escenic – Norway, Nordsource – Denmark and
Rystadenergy – Norway).
Southtech Limited (www.southtechlimited.com)
Southtech Limited provides outsourcing services in the Software Application Develop-
ment Sector primarily using Microsoft and Oracle technologies on the Microsoft and
UNIX platforms. We bring together strong domain experience in areas of banking and
fnance, retail and wholesale management, hospitality management, human resources
management, healthcare, enterprise resource planning and education along with our
well-proven technology capabilities.
Our managers have extensive experience of working in North America, Europe, Middle
East and Asia for large multinationals and corporations.
Southtech has leveraged a wide array of software platforms and languages in crafting
solutions, including Visual Basic.NET, ASP.NET, ADO.NET, Visual Basic 6, Visual
C++ 6, ASP, ADO, COM+, XML, Web Services, MS SQL Server 2000 and 7, Oracle
8i and 9i, MS Access, Visual FoxPro 7.0 and 8.0 etc. In developing software, we follow
industry standard methodologies that encompass RAD, JAD and DSDM techniques.
However, for projects driven by Object Oriented Analysis and Design (OOAD), we fol-
low Unifed Modeling Language (UML) and Rational Unifed Processes (RUP).
Southtech is an ISO 9001:2000 certifed company for software design, development,
maintenance and sales. The company is currently working to become a CMMI company.
DataSoft Systems Bangladesh Limited (www.datasoft-bd.com)
DataSoft, since its inception back in late 90’s, stepped into the core feld of ICT to cater
to the needs of enterprise, governance and economy. Bolstered by a 60-member team of
experienced professionals we have a unique approach towards continuous training and
development of our human resources to adapt to the market demands, both for the
national and international venues. DataSoft initiated Enterprise Software development
projects namely ERP and EAI for manufacturing frms; partnered with the Temenos of
Switzerland for Banking IT solutions; DBMS for large scale frms like Government
authority/corporations/ministries; Credit Bureau DB for international Donor frms and
local NGOs; WAP solution for mobile devices. In response to the global demand,
DataSoft set its platform and is poised to hone its strength of skill and experience into
Gaming software for mobile devices, medical software and embedded software for vari-
ous electronic devices. Standing on three pillars of excellence, quality and durability,
DataSoft is incorporating new technology to further expand our client base and continue
to serve our clients with a little more than utmost satisfaction.
Appendices
48
Bdjobs.com Ltd. (www.bdjobs.com)
BdJobs.com Ltd. is the frst and leading career management site in the country. Eight
young business and IT professional backed by strong command over e-business and in-
depth understanding of the needs of job seekers and employers in the country’s context
started this venture on July 2000. The vision of the company is to try bringing Internet
technology in the mainstream business and economic life of the society.
Our web site aims to explore maximum benefts of the Internet. We believe our service
will help the job seekers manage their career more effciently. This site will also help
employers solve many of the problems associated with traditional recruiting methods and
allow them to save time and money.
Right after its launching, the site has been able to attract the Internet users in the coun-
try. The site regularly updates Job Information (on average more than 1000 valid job
news are placed at any point of time at the site), provides facility to the job seekers for
posting resume and online application. The site has also been able to get good response
from a large number of organisations in the country who use online job advertisement
facility, online CV bank access and online application receiving and processing facility of
www.bdjobs.com. Until now, more than 2,500 employers in the country have recruited
more than 35,000 professionals at different levels for their organisations through Bdjobs.
com service.
eGeneration Limited (www.egeneration.com.bd)
eGeneration is a software services company with tested and matured Software develop-
ment processes like eGen SDP, CMMI, ISO and RUP. With its comprehensive under-
standing of diverse business verticals and wide resources, eGeneration mobilizes the right
people, skills, and technologies to help organisations enhance its performance and trans-
form cost burdens into competitive business assets.
eGeneration operates in the areas such as Application Development, Application
Maintenance and Production Support, Reengineering, Migration and Consulting.
The brief technological competencies eGeneration are as follows:
Technologies .Net, Web Service, Remoting, ActiveX, SOAP, SML/
XSL, Win32 API, TCP/IP, sockets.
Programming C#, VB.NET, ASP.Net, PHP, Jscript
Database/RDBMS MS SQL Server, Oracle, MySQL, PostgreSQL
Application/Web Servers Microsoft IIS, Apache
Process eGen QMS, CMMI, ISO, RUP, MSF
SDLC tools Suite, MS Visual Studio 2005 Team Systems
Software Modeling UML, Agile Modeling
Case tools Rational Rose with UML, ErWin
Testing tools Rational Robot, Rational PureCoverage,
Rational Quantify, NUnit, FxCop
Build tool NANT
Scheduling tool MS Project, MS Project Server
Appendices
49
Groupware and Document
Management MS SharePoint Server
Version Control System MS Visual SourceSafe
Others Crystal Report, Macromedia Dream weaver,
Flash MX 2004, Adobe Photoshop, Adobe Illustrator,
Install Shied
Webcontact
Contact person: Tanveer Ahmad, CEO, e-mail: tanveer@technomentor.com
Webcontact is one of the many small IT companies in Bangladesh solely serving the web
development requirements of International Clients. With competencies in e-Commerce
website programming and design, Webcontact has already made enviable progress in spe-
cifc market niches. The following is a brief of their operation and specialization areas:
Services
• Website maintenance service
• Product catalog creation
• Basic SEO
Domain Expertise
• Clothing and accessories website
• Comprehensive ticket booking system
• E-goods selling websites (Electronically distributed products like: software, photo,
information, membership, e-book, e-zine selling websites)
Supporting products
• Content Management (CMS)
• Forum/Blog
Line of business
Export oriented web development.
Markets focus
30+ small companies and SOHO from USA, Canada, UK, Australia, New Zealand and
West Indies.
The Decode Ltd. (www.decodebd.com)
It is a multidiscipline organisation with several sections of activities. Green Field Toons is
the cartoon animation wing of Decode. Other sections of Decode are CAD Conversion,
GIS Application, 3D/2D Modeling and Non Linear Video Editing.
Established in 1997, The Decode Lid. specializes in Animation, Digital Mapping and
Digital Video Productions. Decode has multiple partnership projects with Canada and
Denmark and employs almost 200 people.
Appendices
50
Key competency
• 2D classical animation from concept to story board, character design, layout,
Animation, composting and post production and 3D Animation in Maya, 3D Studio
Max. Animation Studio is fully equipped with 150 trained artists to cater to all levels
of international standard requirements
• 2D/3D Modeling and walk through from all kinds of Architectural and Engineering
drawings
• Digital Maps from aerial photography and satellite images
• Video post productions, Special effects, color correction with digital output
Technology focus
• US Animation, Maya, 3D Studio Max
• AutoCAD, AutoCAD Maps, ArcCAD etc.
• Discreet Smoke System on
Flora Limited (www.foralimited.com)
Background
Flora Limited is an ISO 9001:2000 certifed company and have achieved multiple
national and international awards. We have started our journey on 1st April, 1972, with
34 years of direct client dealing experience from offce automation to any IT sector. We
are a matured company and ready to handle any volatility and unpredictability of the IT
industry.
The uniqueness of Flora
We have developed our corporate structure in such a resilient way that we can deal with
any kind of IT project not once in a month but day by day and hour by hour basis. From
small clients to corporate clients, every one has access to any of our management team in
any time. We believe that every client has his or her own demands and problems, so as
result our solution is tailored to that unique client. Our focus toward the clients and their
need are second to none, and that is the reason we have around over two hundred thou-
sand satisfed customers around the country.
Rishit Computers Ltd. (www.rishit.com)
Rishit Computers Limited commits to give the best service up to your satisfaction. Rishit
Computer has started its journey at 1999 at BCS Computer City. Taking part at the day
by day improvement along with BCS Computer City, Rishit always tried to give its cus-
tomer the best service up to their satisfaction. Rishit has the motto “satisfaction comes
when price meets quality”. Rishit is always working with only one thing in mind cus-
tomer satisfaction. When satisfaction is the main matter Rishit is working on Price,
Quality, Company Management also come along with it. Rishit is bringing the latest
technology from the world leaders to the customer end, integrate them with their system,
making it familiar to the user end and technology easier.
Appendices
51
Appendix D
Outline of the CSE course curriculum
• Technology
• Math
• Programming
• Physics/Chemistry
• Electronics, Digital circuit and logic
• Computer organisation and architecture
• Database
• Network
• OS, compiler
• Software Engineering
• Generic knowledge related to resource based industries
• Management
• Accounting
• Finance
• Marketing
• HR
• IT

Acknowledgments
First, I would like to thank the Danish Federation of SMEs for giving me the opportu-
nity to carry out this research project. As an optimist of ICT in Bangladesh, I whole-
heartedly applaud their interest in this industry. In addition, I am delighted that I could
contribute in this process.
While carrying out the research, I have had tremendous responses from the people I
talked with. The industry leaders, the relevant associations, agencies, and all others pro-
vided me with extended support in gathering information. I sincerely acknowledge their
support and assistance.
I specially recall the guidance of Mr. Nurul Kabir, CEO, Spinnovation Limited, in pre-
paring the report. His valuable insight as to the content fow of the report has helped me
immensely. I am indebted to Mr. Arild Klokkerhaug, Head of Opportunities,
Somewhere in, for sharing elaborately his experience of establishing IT company in
Bangladesh.
The respected University Faculties in spite of their busy schedules provided me enormous
support in assessing the work force scenario in Bangladesh. In this regard, I am also
grateful to Mr. Fahim Mashroor Chowdhury, CEO, Bdjobs.com for letting me use his
fndings on the work force dynamics.
The support from the relevant association offces was overwhelming. I acknowledge the
‘more than expected’ support from BASIS and BCS secretariats.
Appendices
52
Last but defnitely not the least, I thank Ms. Henriette Freris, Chief Consultant,
DFSME, for providing me with clarifcation to my queries and sharing her own fndings/
suggestions with me to enrich the report. I sincerely thank her for taking the trouble to
work beyond her offce timing to adjust to the time differences between the Denmark
and Bangladesh.
Once again, I thank all who helped me in preparing this report. I hope this research out-
put would be helpful in realizing new business opportunities for Bangladesh and
Denmark.
Appendices
Asiatisk Plads 2
DK-1448 Copenhagen K
Phone: +45 33 92 00 00
Fax: +45 32 54 05 33
E-mail: b2b@um.dk
Internet: www.b2bprogramme.com
www.b2bprogram.dk
ISBN 978-87-7667-764-0 (internet version)
ISBN 978-87-7667-765-7 (print version)
������������������������������������
1
2
4
7
7

/

D
E
S
I
g
N
g
r
A
F
I
K
.
D
K
Phone: +45 33 93 20 00
Fax: +45 33 32 01 74
E-mail: hvr@hvr.dk
Internet: www.hvr.dk

Danida

Business Opportunity Study within the IT and Telecommunication Industry in Bangladesh

A sector study prepared for Danida by Håndværksrådet (The Danish Federation of Small and Medium-Sized Enterprises) in collaboration with Muhammad Hasibul Hasan, Bangladesh November 2006

© Ministry of Foreign Affairs of Denmark Danida November 2006

Publisher Ministry of Foreign 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: www.b2bprogramme.com www.b2bprogram.dk

Production The Danish Federation of Small and Medium-Sized Enterprises (DFSME) Islands Brygge 26 DK-2300 Copenhagen S Phone: +45 33 93 20 00 Internet: www.hvr.dk and Muhammad Hasibul Hasan Apt. # C5, H # 8, R # 13 Dhanmondi Residential Area Dhaka – 1209, Bangladesh Phone: +880 2 8120872 Cell phone : +880 189 286926

Design Designgrafik.dk

Coverphoto Kristian Granquist

The report can be downloaded from: www.b2bprogramme.com ISBN 978-87-7667-764-0 (Internet version) ISBN 978-87-7667-765-7 (print version)

Executive Summary
ICT industry in Bangladesh Industry profile
ICT industry in Bangladesh is relatively new in comparison to other business sectors. However, the unlimited potential of the ICT sector has commended inquisitive interests from all concerned. The impact of global hype of the ICT sector is clearly visible in Bangladesh as well. In the recent years, the local ICT sector has grown enviably. With over 3,000 local enterprises operating in hardware, software and ISP segments, the size of Bangladesh ICT industry at present stands at USD 160 million. With the advantage of earlier initiation, the hardware segment dominates the market share (65 per cent) while the relatively late entrant, software segments command about 15 per cent of the total market. The ITES segment (15 per cent) and Internet and Network Services (5 percent) make up the remaining part of the market. The software segment is relatively new in the market; however, the segment is showing healthy growth in terms of export earnings. According to Bangladesh Bank sources, export earnings from Software and ITES was USD 27.01 million in 2005-06, registering a growth of 113 per cent from the previous year. The software companies in Bangladesh mainly focus on servicing the IT/ITES needs of the local leading sectors like Garments, Banks and Government. At the same time, leveraging the global nature of the IT business, the local entrepreneurs are always looking for international opportunities. Thanks to these efforts, Bangladesh now has become one of the most potential outsourcing destinations in the world. The core strengths of Bangladesh ICT sector is the people. An educated, trainable and young workforce working in this sector possesses the required skill sets to compete in the global scenario. A BCS source revealed that in 2006, the number of IT professionals in Bangladesh was 25,200, which was 12.50 per cent higher than in 2005. The majority of this work force excels in pure technical tasks such as programming and networking. In fact, 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 in programming and networking jobs. However, the same survey states that, much to the delight of the industry experts, the number of ‘non-code’ personnel in the IT companies is rising at fast pace. The success of the IT industry has prompted many relevant associations to evolve to provide focal points for entrepreneurs and foreign investors. The government of Bangladesh has declared the ICT sector as ’thrust’ sector. The creation of a separate Ministry for ICT (Ministry of Science and Information and Technology), formulating favorable laws and initiating government IT projects are encouraging steps for the local/international investors in the Bangladesh ICT industry. In addition to the policy development, the government is keeping close interactions with various industry associations. BASIS, BCS, BCC and ISPAB are some of the apex bodies working for the improvement of the ICT industry in Bangladesh.

3

High-speed Internet connectivity through fiber optics cables costs about USD 2. and Dell etc. Most of the ISPs are now providing 24/7 on-site technical support. Hardware and technical back-up According to research by Springboard Singapore. the higher salary ranges at approximately USD 1. Bangladeshi students have proved their potentials in the international competitions by winning a number of programming contests. For smaller projects. the cost addition due to power shortage may not be significant. therefore. However. Bdjobs. Along with other industry experts. This year. The most significant advantage of the Bangladeshi workforce is the low wage rates. the available workforce is still not adequate to meet the industry demand. The salaries for IT professionals could be as low as USD 75/month. Infrastructure Bangladesh has been building its infrastructure support for the IT industry over the years. the volume of the hardware market in Bangladesh is USD 129. the country ensured global connectivity by connecting to the ‘Information Super Highway’ through SEA-MEA-WE 4 consortium. In general. he suggested improving the industry-academia collaboration to produce the right people for the right jobs. The quality of the graduates coming out of various institutions is satisfactory.600 professionals. all the stakeholders identified stable electricity as the top priority.200/month. The existing VSAT backbone will continue to remain the major Internet infrastructure until the new Backbone (Submarine Cable Connectivity) operates 100 per cent.000 IT graduates. each year the industry faces a shortage of about 1. There are as many as 150 ISPs in the country and the competition among Internet service providers has resulted in significant improvement in their services. but for larger projects the cost of a project may increase for this reason.) are present in the market through their local agents. IBM.Executive Summary Labour force Bangladesh enjoys a clear competitive advantage in its IT labour force. 4 . Each year. most of the international giants (HP. According to Mr. This has developed a strong market for alternative power equipment in the form of UPS (Uninterrupted Power Supply) and IPS (Instant Power Supply). a huge number of non-IT graduates are working in the sector as well.com (BASIS director as well). On the other hand. the country lacks adequate electrical supply.67/per month for 1 kbps connection. various institutions produce about 2.000-1. However. He identified the ‘brain drain’ and a ‘perceived lack of career prospects’ as the two major reasons for this short fall.800 to 2. Fahim Mashroor Chowdhury. In relation to infrastructural weaknesses. must make alternative arrangements to ensure smooth power supply. The companies operating in Bangladesh. The leading universities in the country provide world class IT courses.4 million at present. In addition to that. CEO. Locally assembled and often unbranded machines dominate the pc/server market.

Bangladesh at present is more suited for less complex projects such as web content development. Additionally. The investors in other sectors (textile. The telecom boost in the country presents another opportunity for the IT companies as support service to the telecom companies.) in the close future. the government is seriously taking initiatives towards public 5 . garments etc. Bangladesh does have willing investors with comprehensive local business knowledge. Most large organisations usually go for AMCs (Annual Maintenance Contract) with the vendors.Executive Summary The cost of a PC or server in Bangladesh is in line with world market prices. 2D/3D animation. The skilled labour force is easily trainable and quick learners. mobile content development. Local market opportunities In recent times. The major focus of the telecom opportunities lie in the form of mobile content development and value added service solutions. The industry experts opined that the geographical location of the country is suited to reach out to other markets in Asia. Bangladesh has become one of the prominent outsourcing destinations in the world. the local vendors are of the opinion that an international warranty is not always suitable for clients of brand equipment. Their logic is that the designated vendors (local agents) would always keep their direct customers on their priority lists. Additionally. the international warranty does often not make them directly obligated to provide local support. cheap labour is the biggest competency for the Bangladesh ICT industry. which has created an opportunity for Bangladesh to capture the lower niches (left by India) of the market. back office software development. With their accomplishments in international businesses.) have proven their competencies in international business. CRM. possesses potential to move up the ladder for more complicated projects (ERP. however. Industry competencies As stated in earlier section. To act on its declaration of ICT as ‘thrust sector’. desktop publications and call centers. However. Regarding specific competencies. Bangladesh. After sales support of the hardware is satisfactory. The AMC is customizable in accordance to the client’s need. ASP etc. A branded server with basic configuration costs about USD 6000 whereas the ‘unbranded’ version costs about USD 2. The favorable government policy for the ICT industry is attracting these investors towards this sector. Danish companies could easily venture into this readily available opportunity. They are good at spotting new business opportunities and implement them efficiently.000. India is moving to a higher strata of the global IT market. The average workstation price is USD 700-900 for a brand PC and USD 500-600 for a clone PC. The government is yet another big opportunity that is worth pursuing. they could become the ideal strategic partners for international companies intending to venture into Bangladesh ICT industry. They also show greater commitment to specific areas of concentration – provided the employers carefully build the loyalty.

Groups of companies have many times started in IT as a chance venture. Apart from clashing directly with the Danish/Scandinavian style i. the business vision (or lack of it) of the local IT entrepreneurs is the biggest threat. Bangladesh faces a big threat of ‘resource crunch’ in the near future. Brain drain and attractiveness of other business sectors are reducing the number of professionals pursuing an IT career. This naturally. According to a survey report (by BASIS-KATALYST). The existing supply of Internet access is somewhat constrained. The even field in the lower strata of IT industry – created by the fact that India moving to higher strata – provides equal chance for all potential countries like Bangladesh. and even at high costs no optimal connection is yet available. The report also suggested that demand is gradually growing along with the increase in the awareness level of the SME entrepreneurs. The management style in Bangladesh is largely based on a top-down approach. they enjoy more stable political situation. yet. In addition. each person is responsible for its own job – it also means that Bangladesh is short of middle management skills.e. some existing/perceived threats for the industry remain. the lack of finance for the ‘real’ IT entrepreneurs has limited them from reaching their true potential. The opportunities exist without any doubt. On the other hand. in most cases. the process of legally establishing a company takes a long time. however. It can take up to six months to obtain the necessary licenses. Vietnam and similar countries pose a future threat to the Bangladeshi IT industry. did not succeed. Market threats The Bangladeshi IT industry has many of the right ingredients for success. The industry prospect/potential for those countries is very similar to Bangladesh. China.Executive Summary IT projects. Bangladeshis are used to short term profit from investing in the textile business. 6 .94 million. Vietnam etc. Moreover. At individual company level. The country’s IT policy is favorable. China. the ‘latent IT/ITES demand’ of the specific SME segments is about USD 17. Many of the investors from this sector are also expecting short-term profit in the IT business. The SME sector in Bangladesh has the potential to become a lucrative market niche for the Danish companies. Nordic companies are making use of these opportunities already. The costs of Internet access are relatively high. approvals etc. according to the industry stakeholders. The focus of these projects is in the form of e-governance and office automation. The successful companies in Bangladesh identified preplanning and market-analysis as two of the major success factors for new companies entering the Bangladeshi IT industry. In Bangladesh.

the road to success presents some challenges for Danish IT companies. Entering Bangladesh would help Danish companies in expanding their market and would help them enter new markets. Similarly. need to improve on some aspects if they are to succeed in Bangladesh. however. 7 . On the operational aspect. the training requirement and communication barrier has to be addressed properly to achieve the desired outcome. The foremost success factor is to improve local knowledge. In the long run. Danish companies could venture into the potential Asian markets and they could capture the SME market niche in Bangladesh and in other regions. the HR management needs to be customized to suit the local culture. the communication barriers are to be addressed properly.Executive Summary SWOT The specific success factors that Danish companies could leverage when entering the Bangladesh ICT industry are: • • • • • Business Vision (taking IT as core business) Management Practices (proven effective management practices and business acumen) Business linkages (links with prospective clients in Nordic/EU regions) Regional knowledge (knowledge of the business practices of the regions from where many outsourcing projects placed) Danish Government’s presence (support for relationships between Danish and Bangladeshi companies) The Danish companies. The lack of methodical approach of Bangladesh IT companies (and IT professionals) and their lack of information could become major hurdles in business planning. However. Overall.

2 Servers/workstation availability 4.1 Overall hardware market 4.5 Universities and training institutions 3 Infrastructure 3.10 Working hours etc.3 Proportion of GNI 1.5 Major hardware companies’ presence 5 Key competencies in Bangladesh’s ICT sector 5. 1.3 Availability of skilled labour 2.1 Internet bandwidth availability 3.3 Servers/workstation price 4.4 Export of ICT services 1.2 IT professionals skill matrix 2.4 Labour cost 2.11 Political risks with the industry 2 Labour force 2.1 ICT education in Bangladesh 2.7 ICT industry employment scenario 1.3 Electricity and power stability 4 Hardware and technical back-up 4.2 Size of enterprises (industry volume) 1.6 Investment scenario 1.5 Key areas of operation 1.2 Software application competencies 3 11 11 12 13 13 14 15 15 16 20 21 21 22 22 22 23 24 24 27 27 27 29 30 30 30 30 31 31 32 32 33 8 .9 Tax rules and other policies 1.8 Related associations/governing bodies 1.1 Key industry competencies 5.Table of Contents Executive Summary 1 Introduction to Bangladeshi ICT industry 1.4 Availability of technical support 4.2 Bandwidth cost 3.1 Number of enterprises 1.

2 Micro level 6.1 Specific market segments 6.6 Local market opportunities and threats 6.4 International 7 SWOT Appendices List of abbreviations Reference web sites Case study Interviewed companies Outline of the CSE course curriculum Acknowledgments 35 35 36 36 37 38 41 41 42 43 46 51 51 9 .3 Macro level 6.

10 .

wide spread telecommunication (especially the cellular telephony) outreach all over the country has given the ICT industry in the country an added impetus to move forward. The formation of a substantial number of software development companies is a good indication of this development. Internet services and training and other segments and the statistics of the telecommunication enterprises are not included in that report. The Internet Service Provider (ISP) segment is in tune with the growth of software segment. In accordance with the growth in hardware demand. 1. Bangladesh has seen an increasing growth of the ICT industry. From then on. Recently. both private and public sectors in Bangladesh caught up with effective utilization of information technology. However. there are about 350 software development firms in Bangladesh. Fig. Initially. in accordance with the global trends. the favorable tax policy of the government of Bangladesh in 1998 accompanied by the global affordability of personal computers have had tremendous impact on the usage of computer.1 Number of enterprises A report by Bangladesh Computer Samity (BCS) provides an overview of the composition of ICT enterprises in Bangladesh. 1: Number of ICT enterprises in Bangladesh (Source: BCS) As seen from the figure. the hardware segment dominates the industry with 2500 enterprises in 2006. At present. this segment has shown a steady growth of about 11 per cent per year from 2000 to 2006. The software segment grew at good rates in earlier years but has slowed down relatively in the recent years. The favorable import tax policy on computers and computer accessories during that time was one of the timely steps taken by the government of Bangladesh. the report is focused on software. 11 .1 Introduction to Bangladeshi ICT industry During the late 90’s. hardware.

2 Size of enterprises (industry volume) A report4 included in the “Software Product Catalogue (2006)” published by the Bangladesh Association of Software and Information Services (BASIS) states that the total ICT market size in Bangladesh is USD 160 million.5 per cent.000 fixed telephone lines installed by the BTTB3. The telecommunication segment is sometimes treated separately in the country. currently. Bangladesh has around 1. Sheba Telecom and Bangladesh Rural Telecom Authority (BRTA). 2: Bangladesh domestic ICT market (major) segments 1) 2) 3) 4) 5) BTRC: Bangladesh Telecom Regulatory Commission ITU: International Telecommunication Union (ITU) BTTB: Bangladesh Telephone & Telegraph Board Bangladesh Software Industry and its dynamics ITES: IT Enabled Services 12 . but the impact and the huge volume of the telecom segment is quite significant in the total industry performance. According BTRC1. the number of mobile phone users has reached 15.1 Introduction The recent introduction of advanced technological backbone in the ISP shows a decent growth of the ISP segments (presently 150 ISPs are operating in the country). According to ITU2 data. 1. The present tele-density in Bangladesh is approximately 0. Table 1: Domestic ICT market in Bangladesh Market segment Computer and network hardware Software Other ITES5 Internet and network services (Source: BASIS) Volume (million USD) 105 24 24 8 Proportion (per cent) 65% 15% 15% 5% Fig.5 million in August 2006.000. There are 150 training institutes and auxiliary ICT support companies in the country. The approximate proportion of the ICT industry among different segments is as follows.

However.org (Word Bank .24 2001-02 2.8 The available data for the sector specific GNI were not available. The following chart shows the Bangladesh software and ITES export earning for last five years.68 76% 2005-06 27.4 Export of ICT services According to the Bangladesh Bank source. The export earning from software for year 2005-06 is very nominal 0.3 Proportion of GNI As per Word Bank source. 1.1 Introduction 1.646 141. 3: Software export from Bangladesh 6) Source: http://www. taking the total ICT industry size as USD 160 million (source: BASIS).80 25% 2002-03 4. the GNI indicators for Bangladesh are as follows: 6 GNI (million USD) GNI per capita 66.20 51% 2004-05 12.pdf) 13 .Doing_Business_2007_Country_pages.doingbusiness. Table 2: Export earning of Bangladeshi software in recent 4 years Figures in million USD 2000-01 Software export Yearly growth 2. the approximate GNI from ICT sector comes to 0.20 51% 2003-04 7.002 per cent of the total GNI.01 million in the fiscal year 2005-06 registering a high growth of 113 per cent from the previous year (2004-05).01 113% (Source: Bangladesh Bank) Fig.0004 per cent of the total GNI. export earnings from Software and ITES was USD 27.

Another factor that has contributed to the recent high export growth is the influence of the multinational telecom companies. The export destinations are USA. South Africa and some South East Asian countries.1 Introduction According to industry experts (BASIS leaders).7 1. 4: Industry focus of Bangladesh ICT (software segment) industry The industry analysts find the survey results positive because of the fact that a significant proportion of the software companies (57 per cent) are focusing on the government sector. The obvious implication is that the public ICT projects are increasing in numbers 7) According to BASIS survey (2005) [152 BASIS members and non members companies were surveyed] 8) Yearly software & ITES exposition organised by BASIS 9) This section explains one of the trends and other sections (Labour force) explains the other findings of the survey 14 . the recent development in joint ventures and business collaborations among Danish companies and Bangladeshi software companies would assist significantly in sustaining the enviable growth in the export earning. Australia. Some of these projects are already in place and many others are either in the pipeline or perceived to be coming in the near future. One of the findings of this survey provides a good insight into the client/industry focus of the software companies operating in the Bangladeshi market. These companies while operating in Bangladesh utilized the local IT sector for many of their international projects giving a good software export opportunity for Bangladesh. Canada. EU countries. At present. there are about fifty companies in the country engaged in exporting software and ITES to thirty countries across the globe. The following section reproduces the findings of the BASIS survey of operational domains of the software companies.5 Key areas of operation BASIS carried out a survey among the 152 participating companies in SOFTEXPO8 2005 to find out some key industry trends9. Fig. Japan. Middle East.

The public sector is the largest domestic segment for software (IT) companies in Bangladesh. The focus of the government spending on IT is targeted towards e-governance and office automation. Greater access to this sector has definitely provided added impetus for the local ICT industry. The textile and garment industry is the largest export sector in Bangladesh. The international exposure and competition of the sector have prompted the garment manufacturers to streamline their productivity.springboardresearch. they enjoy a market dominance compared to the indigenous customized software segment.8 per cent in Q1 2006 (Jan-Mar). However. of PC/Server coming to Bangladesh. the textile and garment and the pharmaceutical industry stand out (both at 60 per cent). In recent years. Though. The government segment showed strong growth of 30. In addition.0 per cent of the total PC/Server shipments11. From a buyer perspective.1 Introduction and attracting business people towards them. However. the pharmaceutical industry focuses on fulfilling the needs of the domestic market.com) The shipment refers to No. the multinational companies working in Bangladesh brought in their global software. As a result. As a result.6 Investment scenario The lion’s share of the ICT market in Bangladesh is dominated by the international giants like Microsoft. contrary to garment and textile industry.9 per cent) in Bangladesh but receives limited focus from IT vendors due to the substantial opportunities in the government and large enterprise sectors. Similar scenarios exist in the pharmaceutical industry. 1. the banks are going online – creating a huge demand for software and network solutions. One other aspect of the investment scenario is the presence of international software vendors through local agents. The SME market represents a significant portion of shipments (33. foreign software dominates the banking sector. The large corporations – particularly in banking and telecom – are the key customers driving market growth. contributing around 23. 15 . A recent Springboard10 research reported that Bangladeshi PC/server market generated growth of 23. many export oriented garment companies opted for phase-by-phase automation and thus created opportunities for the local IT companies. Another key operational area for the IT companies is the financial sector. Microsoft in this regard leads the way. The hardware/server market segment in Bangladesh is doing relatively good in its operations. Among other sectors. The off the shelf (packaged/license) software were introduced in the local market in the mid 90s.7 per cent annually mainly due to the increased automation activities of local and national bodies. Oracle. so far. large enterprises are currently the dominant segment of the market. compared to the first quarter of the preceding year. 10) 11) A Singapore based market research company (http://www. The most effective and readily available option was the introduction of process control through automation. Sun etc. recently they have been working with local companies in procuring their ICT requirements.

480 22.01% 3. The booming telecom industry has created a large IT related employment. However.00012 .960 19.) have their own in-house IT consultancy support available. an opportunity exists for IT consultants.50% (Source: Bangladesh Computer Samity (BCS) The BCS reports that in 2006 the number of IT professionals increased by 12.440 15. Table 3: IT professionals in Bangladesh Year 2000 2001 2002 2003 2004 2005 2006 No. 12) Information source: BCS (Bangladesh Computer Samity) 16 .85% 9. In light of that. For the other segments. IBM etc.38% 12. the table shows that there is a slow growth in the 2003-04 period.).1 Introduction Mainly. the proper IT planning is sometimes missing. of professionals 11. When considering the yearly growth.840 18. There are a few such consultancy support companies who have started their formal operation (Microsoft. the initiation and implementation process of IT projects at the organisational level is done through market exploration and an internal operational requirement assessment. but in most cases advice is sought from individuals with IT knowledge. In this case the more established companies (MNCs etc. The reason behind is that the introduction of telecom companies encouraged many aspiring professionals to choose a business education instead of IT studies.7 ICT industry employment scenario The total number of IT professionals available in Bangladesh is more than 25.400 25. 1.70% 4. the trend in the number of IT professionals is gradually increasing as the career opportunities and salaries are increasing. The most severely affected is the software segment.200 Yearly growth 38.50 per cent.46% 19. The exploration based on the internal assessment mainly takes place in the form of market research for available solutions. the technological professionals are switching over to the telecommunication industry leaving alarming many vacancies in the other ICT segments. As a result.720 20.

However. educational level etc. Table 4: Technical job distribution in software companies Job type Network engineer Programmer System architect System analyst Testing/QA Project manager Graphic designer Web developer No. of IT professionals in various years (Source: BCS) According to BASIS.400 3. of respondents 7. have encouraged many of the new graduates from the universities to choose a career in IT companies in areas of business development and customer services. Section 2. The fact that non-technical people are more and more required in the IT industry.850 3. Number of professionals surveyed : 55. the ‘non-code’ professionals in IT companies could establish their prominence more effectively and efficiently.400 4. 5: No.0 (Labour force) includes other findings (skill matrix.700 23. BASIS carried out a survey on 1.) of the same survey. more than 300 local software companies employ about 5.500 software professionals.1 Introduction Fig.000) Industry experts are of the opinion that the significant proportion of the jobs in the ‘noncoding’ segments (Project Management. This section discusses the general findings from that survey.300 4.850 4. Keeping in mind the ever used 80-20 rule for management and technical work in software projects. They contribute to the commitment and seriousness of the local software companies.100 3.100 employees working in 55 companies. the experts believe that with the increase in larger projects.400 Per cent of total respondents 14% 42% 7% 8% 8% 7% 6% 8% (Source: BASIS survey. In 2005 (during SOFTEXPO 2005). System Analysis etc. the curriculum in the universities for business graduates do not include any specialization in busi17 .) is an encouraging sign.

gov. USA.1 Introduction ness and IT (IT Marketing.org) The main objective of establishing BCC was to ensure the effective application and expansion in the use of information technology. In this process. MOICT works as the hub to spread IT around the country.mosict.).Based Training Courses III. 1. Moreover. However.bccbd. • Export Promotion Bureau (EPB) (http://www. The organisation is reorganized by the promulgation of a Presidential Ordinance in 1977 as a semi autonomous body.bd/index. BCC has been formulating appropriate policies and implementing them since its inception. The Council is responsible for promoting ICT related service and businesses in foreign as well as local markets.epb. for Bangladeshi ICT companies inter18 . other industry segments absorb the business graduates for their different operations. In view of this. Consequently.html) The EPB is a National Export Promotion Agency under the Ministry of Commerce. as business and IT is still a relatively new field. IBPC has already established a shared office in Silicon Valley in California. IT Sales etc. • Bangladesh Computer Council (BCC) (http://www. IT. BCC works in three major service areas: I. the honorable Minister for Commerce is the ex-officio Chairman and the Vice-Chairman is the chief executive of the Export Promotion Bureau.8 Related associations/governing bodies • Ministry of Science and Information and Communication Technology (MOICT) (http://www. Headed by a Minister. the biggest hurdle for the universities is the lack of impetus for the new students to decide on the IT all along.gov. The reason behind this establishment was to harness the potential of the IT industry and to channel government support for the growth of the industry. In most cases. there is a gap between the academics and the people from the IT industry. trade associations with the help of various industry development partners are in the process of bridging the gap between the requirements from the industry and the output of a skilled workforce. Initiation and implementation of Development Projects • ICT Business Promotion Council (IBPC) Public and private sector representatives related to the ICT sector have formed an ICT Business Promotion Council. Advisory Services II. The Ministry has set up an ICT incubator and is in the planning process of creating a Hi-Tech Park in order to promote ICT related investments in the private sector (from home and abroad).bd) The former government established the MOICT. top class business graduates are reluctant to engage themselves in the IT industry. IT is administered by a Board of Management (BOM) comprising members from both public and private sectors. The goal of the organisation is to promote export trade and improve plan and policies helpful to the private sector.

The executive Chairman is the Operational Head and CEO of BOI. The ICT industries of Bangladesh comprises distributors.1 Introduction ested in doing business in the US. The Board of Directors has the overall responsibility for running the affairs of BASIS and setting policy guidelines for its secretariat. Its membership includes representatives (at the highest level) of the relevant ministries – industry. Aside from the elected board of directors. software developers and exporters. In light of this vision. BASIS has a strong secretariat headed by the secretary.boi.al. Very soon. BASIS has been working hard to create IT awareness in the society through underlining the high importance of making the country more IT capable for a better future of the nation. • Board of Investment (BOI)(http://www. the association has been working with a vision of developing a vibrant local software and IT service industry in the country. It is headed by the Prime Minister and is a part of the Prime Minister’s Office.bcs-bd. A nine (9) member Board of Directors (elected by direct voting by the members for a two-year term) runs BASIS. the association has been working hard for creating an enabling environment for the software and ITES industry of the country so that it can flourish by rightly utilizing the huge market potential – both at home and abroad. ICT embedded services providers etc.bd) Bangladesh Association of Software and Information Services (BASIS) is the national association for software and IT related services companies of Bangladesh. 19 . • Bangladesh Computer Samity (BCS) (http://www. locally assembled computer vendors. Internet service providers. – as well as others. At the same time.org) Bangladesh Computer Samity is the national association of the ICT companies (mostly focusing on the hardware segment) in Bangladesh. textiles. finance.basis. dealers. different sub-committees comprising of members deal with different policy and development issues.org. such as the Governor of Bangladesh Bank and heads of some business associations. ICT based educational institutions and training houses. et.gov. BCS was established in 1987 with eleven members. • Bangladesh Association of Software and Information Services (BASIS) (http://www. offices in Europe and other cities in the US will be established. resellers of computers and allied products. planning.bd) The Board of Investment (BOI) was established by the Investment Board Act of 1989 to promote and facilitate investment in the private sector both from domestic and overseas sources with a view to contribute to the socio-economic development of Bangladesh. The secretariat is well staffed to deliver various member services and to carry out programs and activities in the different areas as specified within the broad goals of the association. Formed in 1997.

the association safeguards the rights and interests of the members and helps the ICT in Bangladesh through combined strengths of the members. 25 have been implemented by the government and further 9 are in the process of being implemented A pragmatic National ICT Policy has been adopted (2002) The ‘Copy-write’ law is enacted The draft of the ICT Act has been approved by the Cabinet (it awaits the final approval from the policy makers) The government have allocated minimum 2 per cent of ADP (Annual Development Program) in IT spending (more than USD 53 million per year) The software business in Bangladesh enjoys full Income Tax Exemption ICT and ITES products/services enjoy Value Added Tax (VAT) Exemption Generally a 5-7 year tax holiday is provided to foreign direct investors and full repatriation of invested capital.9 Tax rules and other policies13 • • The government declared the ICT sector as a ‘Thrust Sector’ A National ICT Task Force has been formed which is headed by the Honorable Prime Minister.ispabd.More on ICT policy and government initiatives is available at http://www.bd).ccoab-bd. The present VSAT backbone would soon be replaced by high speed fiber optic connection backbone • • • • • • • • • 13) Sources: Board of Investment (http://www.php). • Internet Service Providers Association of Bangladesh (ISPAB) (http://www. profit and dividend is available The government has exempted customs duties and VAT on computers.org) The Internet Service Providers Association of Bangladesh was established in 1998.org. The general purpose of ISPAB is to improve business conditions of the Internet service providers operating in Bangladesh.itforchange. hardware and accessories Now.boi. 1.basis. National Board of Revenue (http://www. Their working areas include Promoting higher business standards Disseminating information Ensuring benefit for members (and their customers) Influencing the government for pragmatic policies Performing functions that are customary among trade associations Cyber Café Owners’ Association of Bangladesh (CCOAB) (http://www. http://www.itforchange. The task force made 45 suggestions for improvements.org).net/WSIS/dhaka .nbr-bd.bd/invest_incentive. The body is run by a 7-number executive council elected every two years.net/WSIS/dhaka/ 20 . Established in 2003. Bangladesh is connected to the Information Super Highway (submarine cable connectivity) through SEA-MEA-WE 4 consortium.org) CCOAB is the trade association of the cyber café businesses at the national level. It serves the common business interest of its members.gov. BASIS (www.1 Introduction The total number of members comprises 524 at present.

21 . In this regard. Working days Weekend Sunday to Thursday Friday and Saturday (Many software companies. most hardware companies. published by World Bank could be very effective. This has prompted suitable/encouraging government policies for the sector. Increasingly. 1.11 Political risks with the industry The government of Bangladesh has declared the ICT sector as one of the major thrust sectors. the ‘Doing Business’.10 Working hours etc. most private companies carry on till 6:30/7:00 pm) The software companies involved with outsourcing and international projects accommodate the time difference with the clients’ countries by customizing the working hours and workdays Time zone Country IDD code Dhaka city code Working hours Special working hours/days 1. it is suggested to consult other reports to learn about the general political risks associated with business. However. the young generation is utilizing the Internet facilities. The country’s political risks do not directly fall under the scope of this report and therefore. the sector is not immune to the general political risks.1 Introduction • • • • • • The fixed and cellular telephone connections have shown significant growth in the last few years An ICT incubator is established and an ICT park is in the pipeline Computer science as a course has been introduced at the High School level The Ministry of Science and ICT has introduced an ICT Internship Program in cooperation with the private sector There are about 600 cyber cafés in the country with 250 of them in Dhaka People are showing encouraging awareness for Internet use. major branches of banks operate during Saturdays) GMT+ 6:00 880 2 9:00 am – 5:00 pm (However.

17 The findings are based on the BASIS Survey 2005. about 50-70 per cent of the graduates choose a non-software firm or go abroad. Fahim Mashroor Chowdhury.800 to 2.800.com Limited. special training and on the job training play a vital role in developing the workforce in the software companies. Companies are stating that the students have a lot to learn when they have graduated and as a result. According to a presentation16 by Mr.1 ICT education in Bangladesh In recent years. most of the university level IT education is concentrated on computer science and engineering courses15. 2.000.2 Labour force 2. CEO. Bdjobs. As a result. At present.2 IT professionals skill matrix The following tables show the academic qualifications and the skill set of the IT professionals working in the software companies in Bangladesh. Each year the number of IT graduates from different universities is 2. However. The survey interviewed 1.100 employees working in 55 local IT companies. it is estimated that each year the industry faces a net shortage of qualified workers in the range of 1. as the IT orientation is not quite widespread in the lower/secondary education system. The estimate is based on an assumption of a 50 per cent industry growth and minimum 20 per cent attrition rate. the industry demand for IT professionals per year is about 2.600. However. the industry relies solely on the competencies the IT professionals obtain during their graduation/post graduation levels.) Masters in computer science/engineering Diploma/certificate courses in IT Other (Source: BASIS survey) 19% 23% 35% 9% 12% 2% (209) (253) (385) (99) (132) (22) 15) An overview of the IT course curricula is included in the appendix 16) Presentation made during a roundtable on ‘HR problems for software companies and possible solutions’ organised by BASIS on June/2005 17) Source: BASIS survey 2005 22 . Table 5: Academic qualification of technical professionals [% (respondent) of total technical staffs in the surveyed software firms] Graduate in Non-IT Masters in Non-IT Computer science/engineering graduate (3/4 yrs. the growing number of private universities has provided new and broader opportunities for aspiring IT professionals to pursue relevant education.

BASIS members have already identified specific steps for improving HR aspects of the software companies. The participating CEOs and MDs in that roundtable agreed with Mr.2 Labour force Table 6: Skill matrix of local software industry [% (respondent) of total surveyed employees skilled in particular area]* Programming language Basic/VB C/C++/VC C# Java Net HTML ASP PHP Javabean JSP CGI Perl Cold fusion 50% 28% 16% 24% 24% 34% 21% 18% 18% 16% 5% 4% (550) (308) (176) (264) (242) (374) (231) (198) (198) (176) (55) (44) Database MS SQL MS Access/FoxPro Oracle PHP Operating system MS NT/2000 Unix/Linux/Solaris Other technical skills XML UML Lotus notes 40% 39% 27% 18% 58% 17% 21% 17% 4% (440) (429) (297) (198) (638) (187) (231) (187) (44) *There are instances where the same respondent identified multiple skill competencies (Source: BASIS survey) 2. The following table present these problems as well as the underlying reasons.3 Availability of skilled labour According to Mr. The problems he identified were presented during a HR Roundtable among the BASIS member representatives. which is a good sign in finding a solution. Chowdhury. we can take the following as the ‘overall’ industry wide view for Bangladesh ICT industry 23 . Problems Unavailability of a pool of employees to be recruited High attrition rate Reasons behind • Computer science course enrollment is declining • Better quality students opting for non-software industry (mainly Telecom and Banking) • High salary range in Telecom and Banking sector • Absence of structured HR policy in most software companies • Lack of ‘finishing school’ to groom fresh graduates • The curricula of training institutions do not match the industry needs Absence of institutional infrastructure for continued training Though the industry faces problems in the HR pool. long-term internship and influencing 18) Mr. Some of these are organisation sponsored training. In light of this. the inspiring fact of the matter is that the local software companies are seriously attempting to change the scenario. Chowdhury while discussing the HR problems in IT companies in Bangladesh. the industry faces few specific problems in availing adequate IT professionals18. Chowdhury is one of the BASIS directors and he has worked as the chairperson for the HR SubCommittee of BASIS. The company chiefs and top management have admitted their difficulties. induction of financial institutions.

net/joycsharp/articles/84330.4 Labour cost There are three main categories of software companies that operate in Bangladesh. Shajalal University of Science and Technology (Sylhet) and Khulna University are also producing good quality IT professionals. infrastructure etc.). 19) Collected from a recent survey report by Mr. The high cost of education at private universities is still out of reach for most of them. In addition. Bangladesh University of Engineering and Technology (BUET) is the leader. The labour cost (salary range) varies across the categories. Of them 21 are public universities while the other 52 are private universities. however. The private universities are new in the education system and most of them lack the basic requirements for university studies. In terms of technical education. joint ventures (JV). The students in the higher education level in Bangladesh mostly come from middle class families. there are 73 universities in the country. the government supported public universities become the obvious choice. University of Dhaka (Computer Science and Engineering Department). The difference in the intake is mainly the result of the cost of education. the inclusion of a higher number of international projects in the industry has provided new impetus for professionals to seek opportunities. These public universities enjoy the ‘quality intake’ advantage over other private universities.5 Universities and training institutions According to statistics of the Ministry of Education. 2. Mohammad Ashraful (the report is available at http:// geekswithblogs. and transnationals. in the recent times (last 2-3 years) have done well in IT education. Some figures are collected through personal interviews 20) The figures are collected through personal interviews 21) The figures are collected through personal interviews 24 . the public universities also provide better resources and environment (faculty. Some of the private universities. Following table displays the salary range of different categories of professionals working in the software industry. Table 7: Salary range of IT professionals in Bangladesh Companies Salary range (USD) Network engineer Programmer* System architect System analyst Testing/QA Project Management Graphic designer Web developer * Depending on experience the range varies Local19 230 – 300 75 – 400 380 – 600 380 – 600 380 – 600 300 – 750 300 – 600 75 – 400 JV20 400 – 750 400 – 700 400 – 900 400 – 900 400 – 900 600 – 900 400 – 700 400 – 700 Transnational21 600 – 1200 400 – 1200 400 – 1000 400 – 1000 400 – 1000 600 – 1200 400 – 1200 400 – 1000 2. Additionally. Naturally.2 Labour force academia.aspx). these are locals.

edu http://www. The industry experts (interviewed company CEOs and BASIS leaders) opined that the training facilities in Bangladesh for the ICT industry are inadequate.) provide advanced level of training courses. Daffodil University and East West University are some of the leading institutions in IT education.2 Labour force The students pursuing IT education in the country have shown tremendous potential over the years – winning international programming contests. These institutions mainly offer diploma courses on engineering subjects. BRAC University.daffodilvarsity.kuet. Among the private universities.bd http://www.univdhaka. Ahsanullah University of Science and Technology. the interviews with the stakeholders revealed a different scenario.bracuniversity. However. Aptech. North South University.ac.sust.edu http://www.northsouth.bd http://www.aiub. However. An unauthenticated source reveals that there are more than 1000 private and public sector computer-training institutes offering IT skill development at various levels.edu www. developing effective antivirus software and many other such achievements are very common for Bangladeshi IT students. The following table provides the web address for the leading universities in Bangladesh for IT education.bd In addition to the universities.buet. Table 8: Leading Universities for IT education in Bangladesh22 Bangladesh University of Engineering and Technology (BUET) Islamic University of Technology (IUT) Dhaka University (DU) Khulna University of Engineering and Technology (KUET) Shajalal University of Science and Technology (SUST) North South University (NSU) Ahsanullah University of Science and Technology (AUST) American International University of Bangladesh (AIUB) East West University (EWU) BRAC University (BU) Daffodil International University (DIU) www. they lack the relevance to the actual needs of the software companies. Few specific institutions (NIIT. the types of training provided are not in line with the industry requirements. Most of these centers are owned and administered by the government through the Technical Education Directorate.edu http://www. Especially.ewubd. Base etc. 22) Source: Personal interview 25 . Most of the training institutions provide training in basic computer skills.edu http://www. there are number of Diploma/Vocational Institutions in the country who provide IT education. Professionals have the option to acquire certifications by Microsoft Certified Partners.aust.ac.ac. In this regard.bd http://www.iutoic-dhaka.edu. BUET and Dhaka University have been most successful. There are 20 government and 87 private polytechnic institutes in the country.edu http://www.edu http://www. American International University of Bangladesh.

Moreover. 26 .2 Labour force To overcome the deficiency of the institutional training facilities. almost all companies develop in-house training programs. they strongly recommended foreign companies coming to Bangladesh to do the same.

Minimum capacity unit for this cable is STM-1 i. still has to be streamlined. MIU is Minimum investment Unit that is equivalent to one STM-1. The following sections describe the general cost of getting an Internet connection. The new Submarine backbone on the other hand. Out of BTTB’s total capacity. The full ranges of bandwidth/Internet connection costs are available at the BTTB’s website (http://www. The following sections provide a summary of the plan and the upcoming Internet connectivity scenario of the country. Bangladesh connects itself to the submarine cable connectivity through the SEA-MEAWE-4 consortium. The BTTB authority has recently publicized a utilization plan of the submarine connectivity.3 3. The BTTB further plans to enhance the capacity of the cable in different phases with minimal investment.000 MIU* Km which may have a maximum of 64 STM-1 (10 Gbps) at the landing station. 3.1 Infrastructure Internet bandwidth availability Bangladesh has joined the Information Super Highway through submarine connectivity in 2006.e. 50.000 MIU* Km has already been contributed to the common pool of the consortium for sale.2 Bandwidth cost The BTTB Internet connection sets the tone for the trend in connectivity. Although the connection to the Submarine Cable Super Highway presents tremendous improvement opportunities for Bangladesh. the present situation in terms of Internet connectivity is not at all satisfactory. 27 . The present VSAT backbone connectivity is slower in nature and is prone to technical difficulties.bttb. BTTB has to utilize the capacity at STM-1 or multiple of that between any two landing stations. Available capacity for BTTB in this cable is 468.net). Bangladesh Telegraph and Telephone Board (BTTB) is the official custodian of the new connectivity backbone.

Backbone problem – within 2 hours.agni. Connection problem – Instantly within Dhaka • 9 am – 8 pm. 3. at the site • 8 pm – 9 am. Automated monitoring system with 24/7 on site technical support (assistance within 15 minutes).) within Dhaka.3 Infrastructure Table 9: LOW COST Internet connectivity for corporate users23 Type of connection* 64 kbps (shared – 2) 64 kbps (dedicated) Average bandwidth 70% (of 64 kbps) 100 % (of 64 kbps) Backbone Initial charge** Monthly Technical support (USD) Charge (USD) 170 1. However.67 USD 25 The client could opt for ‘Higher Bandwidth’ as well. Connection within 7 days (max.rnet-online. Backbone problem – within 5 minutes Average connectivity cost per month for 1 kbps = 2.net) 24) Source: Bangladesh Online Limited (www. according to Internet Service Providers. Connection problem – Instantly 1 hour (max.com) 28 . 2. over the phone. Connection within 7 days of work order. Redundancy support with 4 VSAT 3. for typical usage 64 kbps is adequate ** The charge may vary according to location of the installation * (Fiber optic) 460 Submarine Cable Connectivity – 100% VSAT – 25% (as emergency back-up) (Fiber optic) Submarine Cable Connectivity – 100% 460 64 kbps dedicated (without VSAT support) 100% (of 64 kbps) 210 23) Source: R-net Online (www. 2.com) 25) Source: Agni Systems Limited (http://www.) from work order.bol-online. (Fiber optic) 380 Submarine Cable Connectivity – 100% VSAT – 25% (as emergency back-up) 320 Table 10: HIGH COST Internet connectivity for corporate users24 Type of connection* 64 kbps dedicated (with VSAT support) Average bandwidth 100% (of 64 kbps) Backbone Initial charge** Monthly Technical support (USD) Charge (USD) 300 1.

he said that the additional cost is very insignificant for his company and it increases the cost by about 0.3 Electricity and power stability The problem with electricity is one of the major hurdles the software companies in Bangladesh face.3 Infrastructure 3. utility. 26) ICT Incubator: Government supported infrastructure (floor space. He does not see immediate improvement in country’s power sector.) facilities for small IT entrepreneurs 29 . In this regard. there are special arrangements for an uninterrupted power line. one CEO of a local company said that the problem has been prevailing for last 2-3 years and in recent times it has deteriorated further.5 per cent. Most if not all IT joint ventures have assured that there is a power generator. However. but the other companies with offices all around the city must arrange for alternative power sources. They use UPS (Uninterrupted Power Supply) and IPS (Instant Power Supply) for equipments and computer systems. When asked to comment the cost addition to production due to this alternate electricity support. Through the ICT incubator26. The generators and UPS/IPS are widely available in the market and are quite reasonable in price. He strongly suggested on arranging for an alternate power source for any new ventures. net connection etc. most companies opt for an electric generator for supporting the larger electricity requirement.

340 PCs were shipped from international locations to end-users in Bangladesh for a value of USD 37. spending is routed through the public sector. In the private enterprise market.1 Overall hardware market The PC/Server market in Bangladesh is estimated at USD 129. The report also said that the market growth rate in the first quarter of 2006 (Jan-Mar) was 23. holding over 75 per cent of the PC shipment market shares.4 million.3 Servers/workstation price The cost of a server/workstation varies with the configuration. machines continue to dominate the market.884 units in Q3 2005.com 30 . often un-branded. but both segments are currently in the infancy stage. The following table shows the cost of server/workstation with basic configuration. Most of the international giants also operate in the local market. the international giants usually rely on local distributors and dealers. Springboard. The large enterprises (companies with more than 500 employees) and government sectors collectively accounted for almost half of total PC/server shipments in 2005. banks and telecom companies are largest on IT spending.0 per cent in 2005.2 Servers/workstation availability Locally assembled. HP and Dell all have local distributors in the country.400. but generally. generating a value of USD 129. up from 34. the PC shipments expanded 16. During Q4 2005. Aggressive sales and marketing activities undertaken by MNCs have helped increase PC market growth. 4. In cases of brand equipment. NGOs are also an important source of funding for IT investment in the country. IBM. For the full year (Jan-Dec).springboardresearch.7 million.4 per cent to 162. 48. 4.4 Hardware and technical back-up 4.8 per cent as compared to the first quarter of preceding year. 27) www. The consumer and SME markets represent significant long-term promise.4 million (2005). The laptop market expanded 24. a Singapore based Research Company revealed this in one of their recent research reports27.

4.800 – 2.rishit. The vendors have enough technical knowledge to provide after sales support to their clients. The interviews with local hardware vendors revealed an interesting aspect regarding the after sales support.) Workstation (with OS*) Workstation (without OS) *OS – Operating System 1. the designated local distributors are legally bound to take in the complaints from the customer. In case of a local agreement. The AMC is customizable in accordance to the client’s needs.4 Hardware and technical back-up Table 11: Price (in USD) of server/workstation with basic configuration28 Clone Server (Basic Config. the general support from the vendors is adequate for smaller organisations. as agents of the international giants. the local agreement of maintenance is much more effective than a international warranty agreement. HP led the market with a 7. the vendors would provide the support locally by using their own resources.5 Major hardware companies’ presence Among international vendors. Local Corporate) 31 . increasingly viewed as a viable alternative to international players. A local brand.000 850 – 1. is Daffodil Computers (http://www. the larger users prefer having their own technical support team.com).000 – 6.6 per cent share of the shipments in 2005. followed by Dell and Lenovo/IBM. Though. In some instances. which made several strategic announcements in the fourth quarter of the year. In the latter case the support is more prompt and could be extended even to 24/7 support. (www.com) 29) Source: personal interview/experiences (Large Organisation – MNCs. however.floralimited.700 – 6.500 900 – 1.daffodilbd.800 – 5. 28) Source: Flora Limited (www.000 760 – 900 HP 5.000 900 – 1.000 680 – 760 530 – 600 IBM 4. They opined that. however. Most large organisations29 usually have an Annual Maintenance Contract (AMC) with the vendors.com). Rishit Computers Ltd. they may not necessarily be bound to take the responsibility of providing the technical support by themselves.000 760 – 900 4.4 Availability of technical support The position of the technical support for PC/server hardware troubleshooting is at a satisfactory level. They usually communicate with the regional office and hand over the responsibility to them.000 680 – 830 Dell 6.

the IT professionals in Bangladesh are very good at absorbing new learning (easily trainable). especially. Naturally. As a result.5 5. the Bangladeshi work force can easily be trained to acquire specific technical knowledge. despite their commitment to their work areas.1 Key competencies in Bangladesh’s ICT sector Key industry competencies According to the industry stakeholders/experts. However. most companies need to customize their HR policies to support a long-term commitment of the work force. Bangladeshi students have won a number of programming and mathematical competitions globally. Bangladesh has added advantage for countries that have restrictions in collaborating with ‘nuclear’ countries. The reason for the persistence with a specific work area could be related to the fact that the people working in the ICT industry in Bangladesh are not offered endless opportunities (as is the case for many of the neighbouring countries). In addition to that. Concerning the ICT industry. Another great advantage with the Bangladeshi work force is their longer-term commitment to specific work areas. 32 . the highly skilled labour force comes at a significantly competitive price. However. clusters of experts with different skill sets are available in Bangladesh. Geographical location Geographically. The work force. as ‘nonnuclear’ country. Therefore. IT professionals build their skills in a particular area. they are not always necessarily committed to their organisations. Quick learning/easily trainable The Bangladeshi work force as well as the business people are traditionally renowned for their quick learning abilities. utilization of this advantage would result in growth in all industries. Bangladesh has the potential to become a business hub. has historically strong abilities in mathematical and logical analysis processes. Furthermore. Because of their capability to quick learning. the major competencies (or comparative advantages) for ICT industry in Bangladesh are as follow: Cheap labour Bangladesh has one of the cheapest rates for work force among the similar business destination countries.

the foreign investors feel comfortable working with them. Added to special policy benefits for the ICT sector. Another aspect of these local investors is that they have proven records of accomplishment in international businesses in other sectors such as textile. Availability of financially capable investors Local business investors in Bangladesh are well equipped to invest in strategic alliances and partnerships. More and more investments are coming in and the industry is experiencing growth. in recent times India has moved up in the ladder and is now operating in higher and more complicated levels of IT. In general. the government of Bangladesh has declared the ICT sector as one of the major ‘thrust’ sectors. They think that any for33 . As a result. the respondents of the interviews were of the opinion that Bangladesh is not yet ready for complex outsourcing support. 5.5 Key competencies in Bangladesh’s ICT sector Changed scenario in neighbouring countries India is no doubt the leader in South Asia when it comes to outsourcing and IT as a whole and India is a pioneer. However. The attractive business prospects are bound to encourage local and international investors in the near future. However. As a result. This creates a vacant position for an outsourcing partner who can operate at the lower strata of outsourcing. as intellectual investment in IT businesses sometimes make the return ‘invisible’. These people have funds and are ready to invest money in new industries. in this regard. Favorable government policies As was explained above (please see section 1. the language proficiency is to some extent skewed towards professionals with better schooling. This means many unexplored areas of business.9). However. the favorable investment policies for FDI should encourage companies from other nations to venture into the Bangladesh ICT industry. salaries in India have increased. The willingness of the investors combined with their local business knowledge could be utilized for better return on the investment. Bangladesh gains an edge on this segment of market. In addition.2 Software application competencies In response to the question regarding the specific software application competencies for Bangladesh ICT industry. the local investors have more or less never favored the IT investment. New outsourcing destination Bangladesh is relatively new as an outsourcing destination. the English skills need to be improved for Bangladeshi IT professionals to be able to compete in the global market. English proficiency Bangladeshi people have higher competencies in English compared to countries like China and Vietnam.

the proper resources need to be built gradually. 3D animation and back office development. where the perception of the stakeholders was emphasized. the considerable factors were • • • • • Market awareness Extent of use Availability of workforce Number of companies working in specific areas Competitive advantages over other countries The considerable factors for the potential competencies were similar to the present competencies with the exception in case of potential.5 Key competencies in Bangladesh’s ICT sector eign company intending to enter Bangladesh IT sector. However. should start with small projects such as web development. For venturing into more critical software solutions such as ERP and CRM. In assessing the present competencies. desktop publishing. 34 . all the respondents were very optimistic about the potential of ICT in Bangladesh. publishing ERP (Enterprise Resource Planning) CRM (Customer Relationship Management) CMS (Content Management System) EDI (Electronic Data Exchange) Drawing and model construction Data safety Mobile content development Call centers ASP (Application Service Provider) Data base development  Game Development E-governance Present competencies **** ******* ***** ** * * *** * * ****** * ** * *** ** Potential competencies ******* ********* ******** *** *** ***** ****** *** ** ********* ****** *** **** ***** ******* The rating system presented above is based on the opinions of the interviewed companies. Software application Programming Hardware assembling Desktop design. It mainly asserts the attractiveness of different segments of software development. data entry.

50 million in August 2006 with GrameenPhone as the leading operator31. The booming mobile communication has provided new business opportunities for software companies. The number of mobile phone users in Bangladesh has crossed 15. Knowledge and learning from the Business-to-Business (B2B) Programme could be a good indicator. However. the ICT4D propositions – though not directly designed with a business focus – would result in new business opportunities for IT companies. Animation and Multimedia and Desktop Publications. Canada and Denmark. rather it is wide-spread throughout the country. 11 are software development (outsourcing) projects30.1 Specific market segments The prevailing opportunities within the ICT industry in Bangladesh are as follows. The specific sub-segments within outsourcing are more ready than the others. Of these. Many of the local companies are capable of providing support to the local and international telecom companies. Data Entry. The B2B Programme has as many as 42 projects running in Bangladesh at this moment. The concentration of these opportunities at present lies within value added services. 30) Source: http://www.com 31) Source: Bangladesh Telecommunications Regulatory Commission (BTRC) 35 .psdbangladesh. Additionally. Bangladesh has come a long way in recent years to attract an increasing number of outsourcing projects.6 Local market opportunities and threats 6. UK. Potential/upcoming The telecom sector in Bangladesh is rising at great pace. An encouraging fact about the mobile phone usage is Bangladesh is that it is not restricted to the urban areas only. The government commitments/initiatives towards e-governance have provided a very important opportunity for the software companies. Major countries that are outsourcing IT projects to Bangladesh include USA. the assurance of local support would definitely influence the major telecom companies to procure their operational software from local market A similar segment that came right after the telecom boom is mobile content development opportunities. Readily available The top most readily available segment is the outsourcing segment. Back Office. they include Web Development.

The management style in Bangladesh is to a large extent based on a top-down approach. The vicious cycle of a less attractive career path in IT and the less developed sector due to lack of resources could deeply affect the sector. access to bank finance and lack of business vision of the entrepreneurs. approvals etc. as effective communication overseas is somewhat constrained.e. each person has the responsibility for his/her own job – it also means that Bangladesh is short of middle management skills. As well. the stakeholders reiterated these facts and opined that the aforementioned difficulties could become even larger threat in the future (unless proper steps are taken).6 Local market opportunities & threats Niche The SME sector in Bangladesh is growing at a steady rate. the potential remains. This factor influences the ease with which new ICT companies are established. The quality of Internet connections will affect especially the international possibilities for the sector.basis.2 Micro level Regarding the individual IT companies in Bangladesh. 6.3 Macro level The interviews with different stakeholders revealed that the following industry wide threats might affect the ICT industry in the future. However.94 million. • Labour constraints: Most stakeholders perceive the quality labour constraint as the most threatening aspect to the Bangladesh ICT industry. recruitment (on a medium to long term basis). A survey report32 on the SME segment in Bangladesh revealed that there exists a demand for IT/ITES estimated to the value of USD 17. 6.bd) and KATALYST (www. it takes long time to establish a company legally in Bangladesh. the most difficult aspects at present are: disloyalty of employees in the IT business. has a duration of up till six months. The costs of Internet access are relatively high. The demand is expected to rise at a rate similar to the SME sector growth rate. billing.org. and it can decrease the speed and number of companies in the development of the ICT sector. for instance) to operate as an example and drive the development of the IT business. Especially. Many of the investors who come from this sector are also expecting short term profit in the IT business. The process of obtaining licenses.katalystbd. The demand for software includes accounting.com) 36 . the quality of the Bangladesh IT professionals is deteriorating all the time. and even at high costs no optimal connection is yet available. During the interviews. the cost and the quality of Internet connections influence this development. Apart from clashing directly with the Danish/Scandinavian style i. There is not one large company (like in India. Bangladeshis are used to short term profit from investing in the textile business. The use of IT for the SMEs is not wide spread. Based on the experience of Danish companies. productivity and inventory management. 32) ‘BASIS-KATALYST IT/ITES Study’ (2005) – jointly conducted by BASIS (www.

as the Business IT is still a relatively new field.4 International The international threats from the neighboring countries (especially India) have always been present. A talented group of IT graduates is leaving the country to pursue higher and better education and most of them do not return. top class business graduates are reluctant to engage themselves in the IT industry. In most cases. Moreover. Recently. the business threats coming from India has changed. In this regard. countries like Vietnam and China could become large threats for the Bangladesh IT industry. Brain drain: Brain drain further worsens the labour constraints. Even the business graduates are not willing to work for IT companies. the other industry segments absorb the business graduates for their different operations. which has created an even field for the second category countries. 6.6 Local market opportunities & threats • • Lack of interest: The universities are faced with a problem of declining number of students for IT courses. India is going into an upper segment of the outsourcing/IT support market. 37 .

For instance. The best way to deal with these difficulties is to take in local people • 38 .7 SWOT Strengths According to the literature research and the opinion of the stakeholders. • • • • Weaknesses • HR policy: The Danish companies have to be very careful in trying to implement the HR policy that works in Danish region. then look for opportunities and expect a fast profit. The existing presence of a good record of Danish-Bangladeshi IT projects: Danish companies have already made some progress in entering the Bangladesh ICT industry. the lengthy bureaucratic system in Bangladesh is almost an integral part of business. The IT sector does not enjoy the proper business planning as does the other sectors in the country. Bangladesh and Denmark enjoy a good relationship. Business linkage: Danish companies could use their networks in EU region to secure outsourcing projects and utilize the competencies of the Bangladesh ICT to deliver. The usual trend was/is to start up an IT company. could have serious negative consequences. The differences in cultural values. Danish government’s presence: Danish government has been involved in the development process of Bangladesh. Through the B2B programme and private initiatives. The employee force in Bangladesh has different value sets and that has to be addressed while venturing into the local market. the trade and investment routines of the particular country would provide direction for the strategic partnering companies to serve the specific market. The management and business professionalism of the Danish companies is expected to encourage the potential/existing investors from Bangladesh to venture into IT. unless addressed properly. many Denmark-Bangladesh Joint Venture IT projects are operational at present. • Business vision: Most of the IT companies in Bangladesh severely lack the broader business vision. The Danish companies intending to come to Bangladesh should prepare themselves to cope with the complexity of culture in Bangladesh and to some extent be less naïve in their approach. the Danish companies (especially the IT companies) could bring in some specific strengths that will lead to success of their venture in the ICT industry in Bangladesh. This is where the Danish companies can bring new knowledge. People have to find their ways around these systems and cope with them. The Danes could make the investors understand that a long-term view is required and help them see the world of opportunities. They are as follows. One of the interviewed stakeholders expanded on this point by specifically saying that the Danish companies could utilize their ‘Nordic Way’ to good effect. Cultural bridge: Knowledge of the outsourcing country’s culture could be of great help. Local business knowledge: The stakeholders in the Bangladesh ICT industry opined that foreign companies (especially the Danish companies) trying to come to Bangladesh should spend a significant amount of time on pre-planning. The Danish IT companies could use their government’s good relationship to enter into public service IT projects in Bangladesh. The experiences of these projects would be helpful for planning new business projects in this sector. Especially.

• Niche market penetration The SME sector in Bangladesh has a great demand for IT services. a common communication system would become necessary. He said the problem is not very significant now. • Training needs By adding a new service to their portfolio. They could utilize this advantage in expanding into new market segments in (and outside) Denmark. impatient (for example when it comes to reaching a decision or to get an answer) and not always very polite in their communication. expressive communication: Bangladeshi are very polite and do not always express their opinion i. • New market entrance The cost savings and new revenue flows gives the opportunities to venture into new markets and different segments. Communication: The business communication of the Danish companies sometimes causes misunderstanding. The untapped market could through extensive awareness and marketing drive become a lucrative niche segment 39 .7 SWOT • • • on board. Long term opportunities • Asian market penetration The geographical location of Bangladesh provides a great platform for operating in Asian markets. Immediate opportunities • Horizontal market expansion through outsourcing Outsourcing to Bangladesh gives the Danish companies a definitive competitive advantage in terms of lower costs for products and services.e. misunderstand. On the other hand Danes are very straightforward. The advanced technology as well as business training by the Danish companies would also result in attracting the right people for right job for Danish companies interested to operate from within the Bangladeshi ICT industry (in order to gain competitive advantages). The two cultures are surely clashing regarding the issue of communication and this is something both parts have to recognize and try to overcome. Another option could be to outsource the bureaucratic procedures of ‘Doing Business in Bangladesh’. and think that everything is in order when it is not. However. he is of the opinion that when increasingly more interactions take place in the future. Conservative approach: Some informants said that sometimes the very cautious approach of the Danish companies frustrates the ambitious local partners. Danish business people would always get the reaction they expect. the Danish companies could capitalize through addressing the need for training in Bangladesh. Conservative vs. as pointed out by a local IT company CEO.

Usually. many of the companies face difficulties in times of employee turnover. business acumen and middle management skills. which is now too expensive to outsource to India. the training areas include areas of advanced technology. Generally. the presentation and correspondence skills of the local labour force has room for improvements. 40 . Bangladesh companies and people lack documentation skills and systematic work process skills.7 SWOT for Danish IT companies. Another impact of the lack of methodical approach is difficulties in quality control. • Language barriers Bangladeshi labour force in general lacks English language proficiency. • Lack of information The information sources in Bangladesh are scattered and it can sometimes be difficult to get specific information. strategic alliances with support organisations (e. However. • Lack of methodical approach In general. people use their personal network to get information. there is a significant need to train the existing labour. In this regard. The successes of this niche would provide a platform to enter the neighboring countries where the market size is many times larger than that of Bangladesh. Hurdles • Training requirements The labour market in Bangladesh is cheap.g. Especially. Some government agencies do provide related information. One positive aspect in this regard is that the labour force in Bangladesh is easily trainable. The tools for success in this regard would be the immediate development of competencies in the Bangladesh ICT sector. • Market capturing The Danish companies could go for an ambitious plan of challenging the Indian giants in capturing markets in other countries. financial institutions) could be helpful. In specific areas. The continuity of work could be lost due to this. However. The starting point in this process could realistically be to take on some of the work. the overall researchbased/authentic information sources are not adequate.

Appendices Appendix A Abbreviations and web references List of abbreviations BASIS BCC BCS BoI BRTA B2B BTRC BTTB CCOAB EPB FDI IBPC ISP ISPAB ITES ITU JV MNC MOICT NBR SICT SME USD VAS VAT Bangladesh Association of Software and Information Services Bangladesh Computer Council Bangladesh Computer Samity Board of Investment Bangladesh Rural Telecom Authority Business-to-Business Bangladesh Telecom Regulatory Commission Bangladesh Telegraph and Telephone Board Cyber Café Owners’ Association of Bangladesh Export Promotion Bureau Foreign Direct Investment ICT Business Promotion Council Internet Service Provider Internet Service Providers Association of Bangladesh IT Enabled Services International Telecom Union Joint Venture Multi National Companies Ministry of Science and Information and Communication Technology National Board of Revenue Support to ICT (task force) Small and Medium Enterprises United States Dollar (For this report the currency exchange rate is taken as 1 USD = 66 BDT – Bangladeshi Taka) Value Added Services Value Added Tax 41 .

rishit.southtechlimited.bangladeshgateway.org.php ISPAB www. www.bd WSIS (World Summit on www.somewherein.org www.bd/invest_incentive.decodebd.edu.com Southtech Limited www.org/Cou/BD/CouBDIts.com Ltd. www.org www.bracuniversity.ccoab-bd.bdjobs.org CCOAB www.rnet-online.org.itforchange.bol-online.worldbank.org NBR www.net) www.bd Bangladesh Online Limited (BOL) www.doingbusiness.net/WSIS/dhaka www.com.int www.aspx Bangladesh Development Gateway www.com R-net Online www.moedu.com Rishit Computers Ltd.ispabd.org Daffodil University www.bd BRAC University www.nbr-bd.bd The Decode Ltd.com. TRADO (IT Trade Opportunity) www.trado.psdbangladesh.agni.ac.org www.org www.org.trado.net DataSoft Systems Bangladesh Limited www.bttb.boi.wsis-online.itu.floralimited.com Spinnovation Limited www.gov.com eGerneation Limited www.bcs-bd.com Flora Limited www.epb.bd www.org 42 .boi.com Danida PSD www.katalystbd. www.basis.gov.spinnovation.datasoft-bd.bd www.com www.egeneration.com Ministry of Education www.gov.. the Information Society) www.Appendices Reference web sites BCS BTRC ITU BTTB Doing Business (World Bank) BASIS World Bank Springboard Research MOICT EPB BCC BoI www.bd www.daffodilvarsity.bd Somewhere in.bd www. www.gov.bccbd.net Agni Systems Limited www.btrc.net.bd.gov.springboardresearch.com KATALYST www.mosict.… www..com Bdjobs.

” Every country presents itself with some unique difficulties in business establishment and Bangladesh is no different.… (www. The major working partnership of Somewhere in.… is with Norway though they have also commenced exporting to other Nordic countries. the IT sector in Bangladesh (and foreign investment in general) enjoys 43 . it is hard to learn. He along with his two partners brings with them the Nordic culture and blends them effectively with the local culture. or else how can we design the foundation? They came down to the core values of inclusiveness. imagination..somewherein. The Norwegian Mr.Appendix B Case study Nordic-Bangladesh joint venture To following is a case study of a Nordic-Bangladesh joint venture in Bangladesh ICT market. Somewhere in. The legal procedures can also be very tedious owing to deep-rooted bureaucracy.. Establishment After identifying the rough business idea based on their ICT skills. and all talents we employ. • Challenges Before the partnership began.. That is the secret of the success behind the company. Somewhere in. the founders went into a month of self-analysis and observation. they can learn French..” By religiously applying these values along with their business purpose of creating colorful moments. However. the company identified the challenges that lay ahead. People can learn java.. Somewhere in… has a clear direction for growth. Arild Klokkerhaug.. our identity and values before starting a business.. Head of Opportunities. curiosity and engagement. all projects we take on and all partners we work with must be recognized for these values. The business culture in Bangladesh can sometimes be very ‘unprofessional’ and the lack of commitment is one of the major hurdles for intending investors. Their thinking process was “We had to know and understand ourselves. Let us now look in detail at the road to success for ‘Somewhere in.net) – An outsourcing success story • Background With the motto ‘offshore web solutions – the Nordic way’.. but unless curiosity is in their nature.…’. Three basic roadblocks were as follows: i. Somewhere in…has been living in Bangladesh for more than 12 years. Nordic and Bangladesh).… has been operating within the Bangladesh ICT industry as one of the best outsourcing companies (as claimed by Somewhere in management) for the Nordic region. cultural bridging expertise and mission in life. The strongest competency of the company lies in its in depth knowledge of the two different regions (viz.

Business development You could have all the ingredients of the successful company. To be successful working for the Nordic market. revealed that their strategy in this regard was to ride with the system. still. hardware.. “Therefore.Appendices favorable policies and encouragement. The methodical approach was evident in the fact that they took 1½ year in planning and initiating their business. Klokkerhaug and other partners set specific strategies to follow. Here the Nordic Way proved effective.. Mr. professional firm”. • Strategies While addressing different challenges. they addressed the legal process. but if you do not have the business you do not survive. Nordic background: The top management’s Nordic background and values has been the best foundation for successful business development of the company. “Best of Bangladesh” working for them and to get the BoBs to join.. In addition to people. establishing freedom with responsibility. but we really comprehend the implications of this rule when we start the venture.. Mr. office etc. the founders realized that they had to get only BoB. ii. we pay twice as much to the ISP as for house-rent and electricity”. First. This simple rule we all know. They took similar approach to ensuring infrastruc44 . “Insisting on fast Internet connection.. was also quite formidable challenge for Somewhere in. They were so successful that they now believe that the bureaucratic hurdles are not in fact a major block if proper strategies are followed. Discussion with top management of Somewhere in. appreciating and encouraging participation and giving every talent a chance to build up a small ownership in the company. ii. at the very beginning identified the people as the most crucial resource. identified their relevant strengths as follows. Klokkerhaug appreciated this fact and took up the challenge from the very beginning.. to ensure focus on the core business. This is one of his most critical success factors. He knows the culture and people and has a vast network of business relations. ICT industry knowledge: Finally. Klokkerhaug has been living in Bangladesh for over 12 years. ensuring physical infrastructure such as connectivity. i. they needed to make Somewhere in… a magnet for the best talents. Somewhere in. with all founders having long managerial careers in the local ICT business gave them required business confidence and understanding of opportunities. • Strengths In overcoming the challenges. Local knowledge: Mr. leading by values. Somewhere in… outsourced the registration and accounting process to a well-reputed.. iii. iii.. Human resources Somewhere in. the procedures and documentations can easily frustrate people.

Somewhere in. Success brings success. is best described as the leading offshore partner from operating in Bangladesh for Nordic companies. with Nordic connections and understanding. Synergies: get a virtual in-house department up running without sending key personnel and hard-earned cash to the unknown or why not rent on-demand programmers whenever you need? Focus go from good to great and deal in confidence with like-minded people and culture. are treated as ‘talents’.. • Success The success of Somewhere in.. Rather than using the traditional ‘business development’. In this regard. In addition to ensuring ‘belongingness’. they only serve that region and rejects offers from elsewhere. as both Mr. rather they are treated as minipreneurs’ and business partners. In that regard. Somewhere in. However. also ensures proper recognition and compensation for its talents with a combination of low basic pay.Appendices ture. Klokkerhaug and his other Norwegian partners provided the bridge between the two regions and created a ‘comfort zone’ for the Nordic companies to outsource their projects. people assure the Nordic companies in the following manner. their creativity prompted them to redefine their HR policy.. in the latter case they took a liberal financial strategy. management was finding the work force. Cost-efficiency: invest in us as your offshore development centre to buffer against market demand fluctuations... is now in a process of launching one of the largest strategic alliances in the Bangladesh IT sector. 45 .. according to Somewhere in. They were not worried too much about the management competencies. Mr. Klokkerhaug and his partner were capable and efficient in that regard. They designed a comprehensive recruitment and evaluation system where the employees’ are not treated as employee. They challenged many of the traditional practices of HR in Bangladesh (as well as in many other countries). Their argument was that they would compromise on cost competencies for the shorter term to leverage the foundation in the longer term. they use ‘opportunities’ and the people working in Somewhere in. Naturally. The most difficult of the challenges. The strategy the company followed was to maintain tight focus on the market they wanted to serve. Final hurdle to overcome was to ensure successful business flow. One example in this regard is the different designation for the operational positions.. However. the largest worry was to get the right people for getting the job done. large potential team bonus (not individual) and company shares. In their own words... Somewhere in....

Rather than size. (www.. the company is constantly engineering its process architecture to bring up its customer relationships to a knowledge-alliance model that would lead to co-development of industry components and reusable code in the customers’ respective domains. We aim at having cp agreement with 46 . carrying vendor certification from Microsoft. We started in Bangladesh.net) Somewhere in. was launched with the objective of developing domain capabilities in identified verticals. a country lacking good web and mobile value added services. and ORACLE.somewherein. seven programmers are dedicated for our research and development of mobile solutions for Bangladesh.. Banking and Financial Services etc. such as Business Services. Arve. without compromising the flexibility of vanilla services offerings from an offshore perspective while implementing the work and cultural practices of the client. Spinnovation looks at knowledge as a scalable resource and is committed to quickly respond to customers’ business needs with alacrity and creativity. We are located in Gulshan just five minutes away from all major telephone operators. Distribution. with the first four with long experience from the telecom sector in Bangladesh and Norwegian content providers and the latter being a top programming personality in Bangladesh. Acknowledging that price performance is key to its customers’ competitiveness. Espen. and to provide value-added consulting solutions and ICT services to leading players in the global arena. Lotus. Spinnovation is committed to make a difference to its customers’ ROI by effectively leveraging local talent and passing on the cost benefits that the region offers. and have a fast growth rate.bd) Spinnovation. an ICT Solutions and Services Company. IBM. using the onsite-offshore model of outsourcing.spinnovation. The execution and support engine at Spinnovation is powered by a team of experienced and talented software professionals. In order to gain a firm footing in its chosen niche. Healthcare. the first three Norwegian. Our management consists of Arild.Appendices Appendix C Interviewed companies Spinnovation Limited (www. We do have a normal cp agreement with Grameenphone and are from July launching commercial content services under our own brand. We have 30 talents working with us as of mid July 06. Of these. is a Norwegian (80 per cent) Bangladeshi (20 per cent) joint venture company that has set out on a journey to make a global solution for local communities. Manufacturing. but with a huge and fast growing domestic market. Somewhere in net ltd.com. Jana and Misho.

datasoft-bd.0 and 8. Visual Basic 6. enterprise resource planning and education along with our well-proven technology capabilities. Credit Bureau DB for international Donor firms and local NGOs.Appendices the four major operators by the end of this year. maintenance and sales. XML. We bring together strong domain experience in areas of banking and finance. retail and wholesale management. hospitality management. JAD and DSDM techniques. development. medical software and embedded software for various electronic devices. Web Services. Visual FoxPro 7. Southtech is an ISO 9001:2000 certified company for software design. DBMS for large scale firms like Government authority/corporations/ministries. Bolstered by a 60-member team of experienced professionals we have a unique approach towards continuous training and development of our human resources to adapt to the market demands. ASP. In response to the global demand. DataSoft is incorporating new technology to further expand our client base and continue to serve our clients with a little more than utmost satisfaction. DataSoft Systems Bangladesh Limited (www. including Visual Basic. stepped into the core field of ICT to cater to the needs of enterprise. ASP.0 etc. The company is currently working to become a CMMI company. governance and economy. In developing software. partnered with the Temenos of Switzerland for Banking IT solutions. Southtech Limited (www. Nordsource – Denmark and Rystadenergy – Norway). Standing on three pillars of excellence. ADO. Wavenet – Sri Lanka.southtechlimited. Visual C++ 6. since its inception back in late 90’s. Southtech has leveraged a wide array of software platforms and languages in crafting solutions. Oracle 8i and 9i. Middle East and Asia for large multinationals and corporations. human resources management. Digitania – Norway. Starlife – Russia. Our managers have extensive experience of working in North America. Escenic – Norway. ADO.NET. MS SQL Server 2000 and 7.NET. DataSoft set its platform and is poised to hone its strength of skill and experience into Gaming software for mobile devices.com) Southtech Limited provides outsourcing services in the Software Application Development Sector primarily using Microsoft and Oracle technologies on the Microsoft and UNIX platforms. 47 . we follow industry standard methodologies that encompass RAD. both for the national and international venues. DataSoft initiated Enterprise Software development projects namely ERP and EAI for manufacturing firms. quality and durability.NET. We are also the strategic partner with the following companies (Digitania – Hungary.com) DataSoft. WAP solution for mobile devices. Europe. for projects driven by Object Oriented Analysis and Design (OOAD). However. healthcare. we follow Unified Modeling Language (UML) and Rational Unified Processes (RUP). MS Access. COM+.

Rational Quantify. FxCop NANT MS Project. SML/ XSL. ErWin Rational Robot.Net.500 employers in the country have recruited more than 35. The site regularly updates Job Information (on average more than 1000 valid job news are placed at any point of time at the site).egeneration. skills. Agile Modeling Rational Rose with UML. We believe our service will help the job seekers manage their career more efficiently. With its comprehensive understanding of diverse business verticals and wide resources.Appendices Bdjobs.com) BdJobs.com Ltd.Net. The brief technological competencies eGeneration are as follows: Technologies Programming Database/RDBMS Application/Web Servers Process SDLC tools Software Modeling Case tools Testing tools Build tool Scheduling tool . ActiveX.000 professionals at different levels for their organisations through Bdjobs. eGeneration Limited (www. and technologies to help organisations enhance its performance and transform cost burdens into competitive business assets. CMMI. eGeneration mobilizes the right people.bdjobs. MSF Suite. The site has also been able to get good response from a large number of organisations in the country who use online job advertisement facility. Application Maintenance and Production Support. RUP. NUnit. (www. This site will also help employers solve many of the problems associated with traditional recruiting methods and allow them to save time and money. com service. the site has been able to attract the Internet users in the country. online CV bank access and online application receiving and processing facility of www. SOAP. VB. ASP. sockets. Eight young business and IT professional backed by strong command over e-business and indepth understanding of the needs of job seekers and employers in the country’s context started this venture on July 2000. Migration and Consulting. Rational PureCoverage. more than 2. Oracle. Web Service. Right after its launching.NET.com. Apache eGen QMS. Remoting. CMMI.bdjobs.com Ltd. ISO. TCP/IP. PHP.com. eGeneration operates in the areas such as Application Development. Jscript MS SQL Server. ISO and RUP. Until now. Reengineering. Win32 API. C#.bd) eGeneration is a software services company with tested and matured Software development processes like eGen SDP. is the first and leading career management site in the country. The vision of the company is to try bringing Internet technology in the mainstream business and economic life of the society. MS Visual Studio 2005 Team Systems UML. MS Project Server 48 . provides facility to the job seekers for posting resume and online application. Our web site aims to explore maximum benefits of the Internet. MySQL. PostgreSQL Microsoft IIS.

49 . The Decode Lid. e-zine selling websites) Supporting products • Content Management (CMS) • Forum/Blog Line of business Export oriented web development. Webcontact has already made enviable progress in specific market niches. UK. The following is a brief of their operation and specialization areas: Services • Website maintenance service • Product catalog creation • Basic SEO Domain Expertise • Clothing and accessories website • Comprehensive ticket booking system • E-goods selling websites (Electronically distributed products like: software.com) It is a multidiscipline organisation with several sections of activities. Australia. (www.com Webcontact is one of the many small IT companies in Bangladesh solely serving the web development requirements of International Clients. Adobe Illustrator.decodebd. With competencies in e-Commerce website programming and design. Install Shied Webcontact Contact person: Tanveer Ahmad. information. Flash MX 2004. Green Field Toons is the cartoon animation wing of Decode. Decode has multiple partnership projects with Canada and Denmark and employs almost 200 people. specializes in Animation. e-mail: tanveer@technomentor. Adobe Photoshop. The Decode Ltd.Appendices Groupware and Document Management MS SharePoint Server Version Control System MS Visual SourceSafe Others Crystal Report. Macromedia Dream weaver. CEO. 3D/2D Modeling and Non Linear Video Editing. Established in 1997. Markets focus 30+ small companies and SOHO from USA. Canada. membership. Other sections of Decode are CAD Conversion. Digital Mapping and Digital Video Productions. e-book. New Zealand and West Indies. GIS Application. photo.

• Discreet Smoke System on Flora Limited (www.floralimited. We believe that every client has his or her own demands and problems. AutoCAD Maps. Rishit Computers Ltd.com) Rishit Computers Limited commits to give the best service up to your satisfaction. character design. 3D Studio Max. ArcCAD etc. Our focus toward the clients and their need are second to none. (www. When satisfaction is the main matter Rishit is working on Price.rishit. 1972. 3D Studio Max • AutoCAD. Rishit has the motto “satisfaction comes when price meets quality”.com) Background Flora Limited is an ISO 9001:2000 certified company and have achieved multiple national and international awards. Taking part at the day by day improvement along with BCS Computer City. Quality. color correction with digital output Technology focus • US Animation. We are a matured company and ready to handle any volatility and unpredictability of the IT industry. From small clients to corporate clients. 50 . Rishit always tried to give its customer the best service up to their satisfaction. layout. We have started our journey on 1st April. Rishit Computer has started its journey at 1999 at BCS Computer City. every one has access to any of our management team in any time. The uniqueness of Flora We have developed our corporate structure in such a resilient way that we can deal with any kind of IT project not once in a month but day by day and hour by hour basis. Company Management also come along with it. and that is the reason we have around over two hundred thousand satisfied customers around the country. integrate them with their system. composting and post production and 3D Animation in Maya. Rishit is bringing the latest technology from the world leaders to the customer end. Maya. so as result our solution is tailored to that unique client. with 34 years of direct client dealing experience from office automation to any IT sector.Appendices Key competency • 2D classical animation from concept to story board. Animation. Special effects. Rishit is always working with only one thing in mind customer satisfaction. making it familiar to the user end and technology easier. Animation Studio is fully equipped with 150 trained artists to cater to all levels of international standard requirements • 2D/3D Modeling and walk through from all kinds of Architectural and Engineering drawings • Digital Maps from aerial photography and satellite images • Video post productions.

As an optimist of ICT in Bangladesh. In addition. agencies. compiler • Software Engineering Generic knowledge related to resource based industries • Management • Accounting • Finance • Marketing • HR • IT • Acknowledgments First. CEO. I sincerely acknowledge their support and assistance. the relevant associations. Nurul Kabir.Appendices Appendix D Outline of the CSE course curriculum • Technology • Math • Programming • Physics/Chemistry • Electronics. I am also grateful to Mr. 51 . Bdjobs. Arild Klokkerhaug.com for letting me use his findings on the work force dynamics. I specially recall the guidance of Mr. in preparing the report. I am delighted that I could contribute in this process. I acknowledge the ‘more than expected’ support from BASIS and BCS secretariats. I wholeheartedly applaud their interest in this industry. In this regard. Digital circuit and logic • Computer organisation and architecture • Database • Network • OS. The industry leaders. His valuable insight as to the content flow of the report has helped me immensely. The respected University Faculties in spite of their busy schedules provided me enormous support in assessing the work force scenario in Bangladesh. While carrying out the research. I am indebted to Mr. I have had tremendous responses from the people I talked with. CEO. for sharing elaborately his experience of establishing IT company in Bangladesh. The support from the relevant association offices was overwhelming. Spinnovation Limited. Fahim Mashroor Chowdhury. Head of Opportunities. and all others provided me with extended support in gathering information. I would like to thank the Danish Federation of SMEs for giving me the opportunity to carry out this research project. Somewhere in.

I hope this research output would be helpful in realizing new business opportunities for Bangladesh and Denmark. I sincerely thank her for taking the trouble to work beyond her office timing to adjust to the time differences between the Denmark and Bangladesh. Chief Consultant. Henriette Freris. I thank all who helped me in preparing this report. for providing me with clarification to my queries and sharing her own findings/ suggestions with me to enrich the report. Once again. 52 .Appendices Last but definitely not the least. I thank Ms. DFSME.

.

dk ������������������������������������ Phone: Fax: E-mail: Internet: +45 33 93 20 00 +45 33 32 01 74 hvr@hvr.dk www.b2bprogramme.Asiatisk Plads 2 DK-1448 Copenhagen K Phone: Fax: E-mail: Internet: +45 33 92 00 00 +45 32 54 05 33 b2b@um.com www.b2bprogram.hvr.dk 12477 / DESIgNgrAFIK.DK ISBN 978-87-7667-764-0 (internet version) ISBN 978-87-7667-765-7 (print version) .dk www.