Market grows 4K times, but Internet speed crawls

The Internet market has boomed 4,000 times in Bangladesh over the last two and a half decades, but operators still cannot keep pace with the ever-increasing demand for high-speed bandwidth

Consumers bore the brunt of this slow but costly connectivity especially amid the pandemic when Internet usage marked a surge.

Broadband and mobile Internet costs in Bangladesh are higher than those in any South Asian country, although speed is among the slowest and service equally poor.

Internet service providers blame high transmission charges for the high costs of services.

Only a Tk6 crore annual Internet market in 1996 – when it made inroads into Bangladesh with a maximum speed of 64kbps – has now reached Tk24,000 crore with a capacity of 2,400Gbps.

But Internet speeds cannot match the growing demand of businesses and services increasingly depending on high-performance connectivity.

According to a Cable.co.uk report, Bangladesh has the third-worst broadband speed of the South Asian average.

Stakeholders claimed that they cannot provide customers with uninterrupted Internet services because of frequent disruptions in bandwidth supply caused by frequent repairs and installation works by the Water Development Board, the Roads and Highways Department, power distribution companies, and other utility agencies.

Experts, however, say Internet service quality is lower in Bangladesh because there is no healthy competition among the mushrooming service providers with little overview.

Sumon Ahmed Sabir, a telecom expert having 20 years of experience in the ICT sector, said "Services in some areas are good but poor in others due to uneven competition among service providers."

"Quality service depends on pricing, competition and good intentions. None has been ensured in Bangladesh," he added.

Internet service started with 64kbps VSAT

The country's Internet journey began 25 years ago with Very Small Aperture Terminal (VSAT), a wireless communication system that uses a combination of a small antenna and satellite terminal equipment. The maximum speed was only 64kbps.

At that time, the average Internet speed was below 16kbps, and downloading a small picture would take 30 minutes to one hour, said officials at the Internet Service Providers Association of Bangladesh (ISPAB).

There was only one Internet service provider, the Information Services Network that used to offer connectivity. Over the decades, the number of such service providers has reached 1,792 across the country.

Meanwhile, the country's Internet bandwidth capacity has also increased to 2,400Gbps through submarine cables.

Currently, there are 11 crore internet subscribers in the country and the highest bandwidth consumption of 1800Gbps was reached last December.

According to stakeholders' data, Internet consumption has increased by 2.94 crore times over the years.

Md Emdadul Haque, secretary general of the ISPAB, said the dramatic change in the Internet capacity happened in 2005 when Bangladesh's bandwidth capacity jumped to 7.5Gbps after the country secured its membership in the SEA-ME-WE-4 submarine cable consortium.

The SMW-4 is an optical fibre submarine communications cable system that connects many countries of Southeast Asia, the Middle East and Western Europe.

Later, the capacity went up to 400Gbps after several upgrades in the submarine cable. 

Further, in 2017, the country got its membership with the SEA-ME-WE-5 submarine cable consortium. 

The country's bandwidth capacity has reached 2,400Gbps after getting connected with the second submarine cable and contacts with International Terrestrial Cable (ITC) operators.

How the Internet ecosystem works

The submarine cables that Bangladesh owns are operated and maintained by the consortiums of the SMW-4 and 5. Bangladesh pays an amount for maintenance that varies each year to the consortiums.

Out of the country's total bandwidth demand, the state-owned Bangladesh Submarine Cable Company Limited (BSCCL) provides 62%, while six ITC operators provide the remaining bandwidth.

The distribution ecosystem of the Internet in the local market involves many stakeholders that include International Internet Gateway (IIG) providers, International Gateway (IGW) operators, Nationwide Telecommunication Transmission Network (NTTN) operators and ISPs.

The submarine cable company sells bulk internet to the IIGs and IGWs in different slabs at a rate set by the government.

On the other hand, ITC operators that import the Internet from different countries sell bandwidth through open market methods, stakeholders said.

After that, IIGs sell the Internet to the ISPs who deliver the Internet to end-users at Tk350 per Mbps.

For carrying the bandwidth to customers, ISPs depend on NTTN operators and pay Tk2-6 Mbps per metre, said Md Emdadul Haque.

Costliest bandwidth among South Asian countries

In the last 12 years, per Mbps cost has decreased drastically. Per Mbps broadband Internet was Tk72,000 in 2008, which has now dropped to Tk350.

However, the country's broadband cost is still higher than in other neighbouring South Asian countries.

According to the Cable.Co.UK's data, per megabit broadband data costs $13.15 per month in Nepal, which is $31.34 in Bangladesh.

India also provides the bandwidth Internet almost at the same rate as does Nepal. Not only that, Pakistan also provides cheaper Internet in its territory at $20.43 megabit per month.

When contacted, Syed Almas Kabir, chief executive officer at MetroNet Bangladesh Limited – one of the leading broadband Internet service providers in the country, said high data transmission charges prevent them from providing cheaper Internet to consumers.

"We shall not be able to provide cheaper Internet until the transmission cost is reduced. In the last decade, bandwidth cost has come down a lot but the transmission cost has not," said Syed Almas Kabir.

Posts, Telecommunications and Information Technology Minister Mustafa Jabbar told The Business Standard that the reason is that the NTTN has not yet been expanded as expected.

"We are seriously considering improving the performance of NTTN operators and rationalising their pricing," he said.

Currently, there are six NTTN operators in the country. Summit Communication Ltd and [email protected] jointly hold more than 40% of the share of the NTTN market.

Bandwidth export

After meeting local bandwidth demand, Bangladesh used to export 10Gbps to the Tripura state of India between February 2016 and 2020.

Per Mbps bandwidth was $10. The export stopped in 2020 due to price and dues issues.

In recent years, other countries, especially Nepal, Myanmar and Saudi Arabia, have also shown interest in importing Internet bandwidth from Bangladesh.

Bangladesh had launched an initiative in 2014 for exporting Internet bandwidth to Bhutan after the latter showed interest, but the plan is yet to be set in motion.

Talking about this, Minister Mustafa Jabbar said, "Before export, we have to think about meeting our own demand that doubled last year."

However, a big chunk of the Internet can be exported to Saudi Arabia, Nepal and Bhutan, once the third submarine cable comes into operation, he pointed out.