Submarine Cable Company’s profit jumps eightfold

Bangladesh Submarine Cable Company Ltd’s (BSCCL) net profit climbed eight times last fiscal year, on the back of a boost in bandwidth usage through a second undersea cable. 

The state-run cable company’s net profit rose to Tk 58.58 crore in 2018-19 from Tk 7.33 crore in 2017-18, according to its annual financial statement. 

The company also clocked the highest ever single year revenue of Tk 195.57 crore last fiscal year during its decade-long journey.

The BSCCL has decided to offer only 16 percent cash dividend to shareholders, meaning it will have to set aside Tk 27 crore from the net profit, said Managing Director Mashiur Rahman.

In 2017-18, the company declared 5 percent cash dividend, the lowest since its listing in 2012.

“We have decided to go for another undersea cable and for that we will have to save some money to bear the expenses,” said Rahman.

In order to connect with SEA-ME-WE-6 (South East Asia–Middle East–Western Europe), an optical fibre submarine communications cable system, the BSCCL will need Tk 600 crore.

The cable company has decided to earmark Tk 30 crore from last fiscal year’s net profit. In the next two years, the BSCCL will have to do the same, Rahman said.

“As we are a profitable company, the government is unwilling to support us to implement a project. So, we have to mobilise funds on our own.”

The company will borrow from development partners to bankroll the third cable. “But our intention is to take as less loans as possible to keep the installment size smaller and ensure more profit for us in the future,” he added.

The BSCCL has leeway to borrow from the government by issuing shares, Rahman said.

The company has signed a memorandum of understanding with the SEA-ME-WE 6 consortium and would ink the final contract in the first quarter next year. 

The country will be connected with its third undersea cable in June 2023, adding 10 terabits per second bandwidth to the national capacity.

Bangladesh was connected with its first undersea cable, SEA-ME-WE 4, in 2006 and with the second one, SEA-ME-WE 5, in 2017.

The SEA-ME-WE 4 initially had 10 Gbps capacity but it was later increased to 300 Gbps and it will last only five more years. Thanks to the SEA-ME-WE 5, the BSCCL received 1,500 Gbps but it rose to 2,300 Gbps with technical advancements.

Once the country gets connected with the third cable, it would boost the cable company’s revenue and increase profit as the country is moving towards digitalisation.

In the last few years, bandwidth consumption has doubled in Bangladesh and this growth trend will continue in the coming days.

As of September, the country’s total international bandwidth consumption reached 1,250 Gbps, of which the BSCCL is supplying 650 Gbps, officials said. The rest is imported from India.  

The government owns 73.84 percent stake in the company, while institutional investors own 11.20 percent, foreign investors 3.03 percent, and general public 11.94 percent.

The BSCCL shares closed down 2.95 percent at Tk 108.30 on Dhaka Stock Exchange yesterday.