Move to sell bandwidth at 65.6 times lower rate

The government has approved a deal to sell a chunk of unused bandwidth to an Italian company at a price 65.6 times lower than the market rate. It was done without proper bidding or offering local players an option to buy it.

Bangladesh Submarine Cable Company Ltd or BSCCL received a go-ahead to sell its 57 gigabits per second bandwidth to Telecom Italia Sparkels for Tk 9.77 crore, the total amount for 15 years, which is the life of the submarine cable.

It means a megabyte per second (Mbps) of bandwidth will cost a mere Tk 9.52 a month, compared to the lowest local price of Tk 625. If it were to sell the 57 gigabits per second bandwidth in the local market instead of Italia Sparkels, the price would amount to Tk 641.25 crore.

Experts and local players who deal with internet bandwidth said it is an outrageously low price, and it is not acceptable that BSCCL is charging much less for exporting bandwidth.

BSCCL will receive an additional 3 percent of the sale price a year for 15 years as maintenance charge, according to the approved document. This will total Tk 4.4 crore but for that, BSCCL will lose control over the cable.

“It may look like a loss, but huge capacity is still unused. Whatever we can earn through the deal will benefit us,” said Monowar Hossain, managing director of BSCCL, a state-owned company.

The approved price also meets international standards, according to Hossain.

Sumon Ahmed Sabir, chief strategy officer of Fiber@home Ltd, said: “This is an unbelievable price and we are ready to pay this price anytime. No need to sell it outside in the name of exports.”

If they are given the chance, they would offer high speed internet at cheaper rates to their local users, he added.

Experts said BSCCL has set a double standard for exporting bandwidth: it has signed a deal to export 10 Gbps bandwidth to seven states of India at a price of Tk 9.36 crore a year, but they are going to ink a deal to export 57 Gbps for 15 years at a price of Tk 9.77 crore.

However, Hossain said the two issues are not comparable as they are only selling connectivity in the deal with Italy, but they have to add more components like international backhaul and transmission charges to export to India.

Mustafa Jabbar, former president of Bangladesh Computer Samity, said: “In the name of exporting bandwidth, we can't give it free. We should rather consider making it free for our students, which will directly benefit our country and the economy.”

Currently, only 33 Gbps bandwidth is being locally used from BSCCL's capacity of 200 Gbps. But the country's demand for an additional 136 Gbps is being imported from six different Indian companies as local prices are higher.

Md Hasibur Rashid, chief marketing officer of NovoCom Ltd, suggests an open tender to sell the unused bandwidth.

Asked to comment on the matter, Tarana Halim, sate minister for telecom, said she has no idea about it.

The BSCCL proposal was approved on August 23, but the deal has not been signed yet.

Earlier in February, Italia Sparkels proposed to buy around 90 Gbps at only Tk 16 crore, but the government had rejected it.

In June, Italia Sparkels revised its proposal and sought 10 Gbps for a year at a rate of $14,000 a month.

The government approved the deal, but Italia Sparkels later backed out, said a senior official of the telecom division.

Bangladesh was connected to its first submarine cable or SEA-ME-WE-4 in 2006 at a cost of $63 million; BSCCL earned the amount back in three years and whatever they are earning now is their profit, officials said.

Within two years, BSCCL will link up with its second cable or SEA-ME-WE-5 and obtain an additional 1,300 Gbps of bandwidth, said Hossain of BSCCL.

“We will have no shortage of bandwidth then.”

Hossain said they are planning to sell out 20 Gbps of bandwidth each to Japanese company Nippon Telegraph and Indian company Bharti Airtel.

BSCCL also plans to export bandwidth to land locked countries such as Nepal and Bhutan.