Information Services Network – the country's first internet service provider (ISP) – is struggling because it has not upgraded its technology to survive on the competitive market.
The company, which was listed on the stock market in 2002, was not able to pay dividends to its shareholders for five years in a row from 2013.
In the last financial year, it made a profit and provided just a two percent cash dividend to its shareholders. However, its sponsors and directors did not receive any dividends.
HRC Group and Ispahani Group jointly set up the company in 1996. Later, Ispahani withdrew its stake.
Sayeed Hossain Chowdhury, chairman of the company, told The Business Standard, "We are trying to bring the company to a better situation."
About the country's doing-business environment, he said competition has increased in the internet business.
The paid-up capital of the company is Tk10.92 crore.
Sponsors and directors hold 21.62 percent shares of the company, while institutional investors have 12.86 percent and general investors hold the remaining 65.52 percent.
Reasons for the downfall
The company initially ran well, but it lost its business to competitors due to a lack of modernisation and skilled employees.
Meanwhile, Aamra Network Ltd – which entered the internet business in 2001 – has installed new technology, occasionally, to keep up the pace with progress. It earned Tk43 crore from the internet business last year.
Whereas, Information Services Network has earned only Tk5 crore.
It experienced trouble with its business in 2003.
A senior official at the company, seeking to remain anonymous, identified two reasons behind their weak business – unwillingness of the owners to expand the business and growing competition on the internet market.
In addition to that, the current value added tax (VAT) law has been another barrier to the internet business. Internet service providers pay 15 percent VAT on bandwidth purchases and collect just five percent VAT from their subscribers.
Expansion plan despite pressures
Information Services Network has undertaken a number of expansion plans. These include: establishing branch offices, expanding the network, expanding the number of network operation centres, setting up servers and network equipment solution providers, and providing cyber security solutions.
The company official also said, "We are preparing for new investment from our profits."
The number of netizens in the country is on the rise. In the last five years, internet users have increased by 128 percent to 9.81 crore, according to the Bangladesh Telecommunications Regulatory Commission.
Of them, 57.39 lakh are using a broadband internet service. The number of broadband users has increased by 365 percent over the last five years.
Bangladesh has 1,530 internet service providers.