The State of ICT Network
Connectivity
Sami Ahmed
BASIS
December 4, 2014
Infrastructure and Connectivity
• Power Supply – Increased by 100% in the last 5
years
• Nationwide Network – 3g/4g;
• Bangladesh Connects to SEAMEWE4 and soon to
SEAMEWE5
• Cost of Devices have gone down
• Cost of bandwidth – Tk. 2800/Mbps
• Bangabandhu Satellite expected to launch by
2017
The Telecom Industry in
Bangladesh
International
Connectivity
• BSCCL is the lone
submarine cable
based connectivity
provider
• 6 ITCs are providing
terrestrial cable
based connectivity
through India
IGW and IIG
NTTN
ANS Networks
• IGW: 26 licenses
• IIG 36 licenses
• Most of the IGW and
IIG license holders
do not have active
gateway business
• Operators: 03
• Two private NTTN
operators and one
public operator
• Mobile Operators: 06
• BWA operators : 05
• PSTN Operators:
BTCL
• private PSTN other
than RanksTel,
most of them are
not functional
• ISPs: more than 50
Broadband connectivity has a correlation to Economic Growth (ITU, 2012).
Unfortunately we have not been able to maximize on this.
The price of broadband at the end user level
has been inelastic in relation to wholesale
price
Low penetration of broadband in rural areas
Limited Supply, high cost, slow speed and
low value added usages are primary causes
of poor penetration
Possibilities with seamless Broadband Connectivity
1.Connect millions of graduating students to the global service market,
commonly known as freelancing or BPO.
2.Deliver high value, bandwidth intensive, e-service and digital content (e.g.,
health, education, Government) to each citizen.
3.Connect--through video conferencing (smart TV)-- millions of house holds to
family heads, working abroad for sending remittance.
4.Improve competitiveness of the economy through integration of citizens,
enterprises, Government, and the supply chain, both domestic and
international, with densely connected information system.
Present Situation
1.Due to limited access, unaffordability and poor value
proposition, Broadband penetration as well as usages
(0.3Kbps/person) is very low in Bangladesh, particularly in rural
areas.
2.Although 3G service is taking off, growth of wire line Broadband
is slow—may be even negative.
3.Broadband price at the end user level is very weakly
proportionate to wholesale IIG price.
4.Due to low penetration and very limited usages (data
consumption), socio-economic gain from Broadband service is
mostly unrealized.
Binding Constraints
1.Low economy of scale and scope –basically only one product-- is limiting the
price reduction capability of wire line Broadband operators (Ethernet LAN based
ISPs, which add 80% cost) in Bangladesh.
2.Scarcity of spectrum and high CAPEX/OPEX (95% cost addition) are limiting
factors of wireless, 3G or 4G, Broadband service, .
–Mobile service, such as 3G or 4G, has very limited capability to unlock growth
potential through Broadband service. Usually, wireless service meets 10% data
consumption need; remaining 90% should be met with wire line service.
3.Most of rural Bangladesh is not covered by transmission network due to weak
prevailing demand; as a result, wire line ISPs are facing limitation in expansion.
4.Due to weak investment capability of NTTN operators and ISPs, demand led-instead of supply led-- expansion strategy is failing to unlock latent potential
(demand) of Broadband service, particularly in rural Bangladesh.
The Global and Regional Scenario
1.ADSL/DSL over copper lines of incumbent PSTN operators kick started the 1st wave of Broadband
services in most of the countries, including India (ADSL shares 80%+ of wire line).
2.Cable network, primarily built for TV service, was the driver of the 2nd wave of Broadband service; in the
USA, two third customers use Cable-Modem and one third use DSL to access high speed Broadband.
3.Ethernet LAN played extremely limited role in delivering Broadband service in most of the countries,
except Bangladesh where this is the dominant wire line Broadband technology platform.
4.FTTH/FTTP (Fiber) is growing as a preferred technology platform for unlocking economic potential of
Broadband service, particularly in Japan, Korea and Europe.
5.Ecosystem of ADSL/DSL/VDSL and Cable-Modem have started to disintegrate.
6.Growing ecosystem and economy of scale as well as scope will drive the quality up and cost down of
FTTH connectivity in coming years.
7.Despite significant progress, 3G/4G service meets less than 10% data consumption need in advanced
economies. Due to spectrum scarcity and high cost in geographical spectrum reuse or cell splitting, its
share of data market will start falling.
8.Public-private partnership is playing growing role, particularly in building transmission network in rural
areas, to develop densely connected FTTH network for maximizing benefit from Broadband services.
Bangladesh’s Broadband Scenario is Different
1.BTCL’s weak response to take the advantage of global ADSL/DSL trend to upgrade telecom
infrastructure to deliver Broadband service resulted in low wire line Broadband penetration (less
than 5% of 5,00,00 wire line connections in contrary to more than 80% in India).
–Strong response could have enabled BTCL to benefit from both economy of scale and scope to
offer more affordable and accessible Broadband service in Bangladesh.
2.Fragmented CableTV industry failed to benefit from the global trend to offer more affordable
and accessible Broadband service over CableTV network.
3.Only one product (Internet connectivity), low investment capability, and limited network size of
Ethernet LAN based ISPs have resulted in high cost wire line service --in urban areas only.
4.Excessive, or sole, reliance on wireless, 3G or 4G, is about to make Bangladesh fail to benefit from
global trend of FTTH, Fiber to the Home Connectivity.
–Even BTCL is trying to arrest its revenue erosion through expansion in wireless services (3G and
LTE), instead of upgrading its copper local loop to FTTH.
Recommendations
1.
Make public investment to extend the Nation Wide Telecom
Transmission Network and provide FTTH connections in areas,
primarily rural parts, where private investment is absent (weak).
2.
Give incentive to private NTTN operators to expedite network
expansion in semi-urban areas, and give more NTTN licenses.
3.
Strengthening of BTCL; upgrade its copper based local loop to kick
start FTTH connectivity to offer triple play services: 1.Voice, 2.Video,
and 3. Data.
4.
Connect Second Submarine cable at the earliest