Bangladesh takes LIRNEasia advice, belatedly and partially

Posted on October 2, 2008  /  1 Comments

In December 2005 Bangladesh became connected to the SEA-ME-WE 4 undersea cable, but it took much longer for the people of Bangladesh to actually use the connectivity, because the incumbent government-owned monopoly BTTB had not been able to connect the country’s networks to the landing station in Cox’s Bazar in time. I was invited to speak on this subject at a meeting in Dhaka at which the then Minister and other senior decision makers were present (they had little alternative, there was a hartal going on outside).

These comments were written up as an op ed piece and published in the Daily Star that same month. In it I recommended the following:

“Without lessening the urgency of reforming Bangladesh’s regulatory framework, the immediate problem can be addressed by structurally separating the cable segment (the share of the SEA-ME-WE 4 cable, the cable station, the fibre connecting the landing station to major population centers, the redundancy channels and related facilities) from BTTB, vesting its ownership in a fully government owned company.

To ensure that the new company is truly separate from BTTB and that it is efficiently managed, it is necessary to concession out its management to a competent international operator through a transparent bidding process. The management contract must include provisions for avoiding conflict of interest (operator cannot be involved in running downstream businesses within Bangladesh), incentivising greatest use of capacity, and ensuring non-discriminatory pricing to operators (e.g. mandating web-publication of capacity sale terms and prices as well as quality of service indicators).

The implementation of this institutional arrangement will, no doubt, take some time. It should have been done as soon as Bangladesh decided to join the SEA-ME-WE 4 consortium. But that is water under the bridge. Given the current delays in completing the Chittagong-Cox’s Bazar dry segment, the government can expeditiously implement this solution without wasting more time.

The choice before the government today is no different from that facing a home builder who discovers that the foundation of his house is fundamentally flawed. Fixing the foundation will take time and money, but those costs less than those of perpetually repairing the house with the flawed foundation or of being unable to make full use of the house.”

I understand the government has recently created a separate entity to manage the common facilities centered on the undersea cable. However, they have not implemented the proposal of concessioning out its management to a competent international operator. Is something better than nothing? Will the new government-owned company perform better than the do-nothing BTTB (now renamed as BTC)?

From the perspective of LIRNEasia’s tracking of the efficacy of its interventions, this poses a small challenge in that the intervention was made in December 2005 and the results are observed in 2008, almost three years later. But we found out and we’re happy. We just hope the partial implementation will yield at least partially good results.

1 Comment

  1. “The customer agrees that BTCL will allocate bandwidth from 64 Kbps to 2 Mbps depending on the requirement and justification of the customer and higher bandwidth up to 45 Mbps will be allocated after scrutiny by BTCL. The customer will request for up-gradation of the bandwidth of the IPLC to BTCL with detail reasoning.” This is one of the clauses in BTCL’s Agreement to sell international private leased circuit (IPLC) of the submarine cable. Please also take a look at the Application Form. This outfit is still being manned by the incompetent and outdated government officers. They should be replaced by the professionals ASAP. Otherwise, the reform will make no sense.