Bangladesh your next ICT Destination
WE ARE COMMITTED TO ESTABLISHING DIGITAL BANGLADESH BY 2021 Sheikh Hasina Honorable Prime Minister of Bangladesh
Message from the Minister’s Desk The IT Industry will be the topmost revenue earner for the country in the coming days Sajeeb Wazed Adviser to Hon’ble PM
At the outset, I would like to use this medium to express my gratitude for your interest in Bangladesh and its emerging ICT sector. ‘Digital Bangladesh’ is an ambitious endeavor for us and a critical lever to realize our ‘Vision 2021’ of becoming a middle income economy in the next 4 years. We have worked relentlessly towards this goal by heavily investing in the local IT and ITES industry to make it competitive at a global level. We believe that our industry offers all the right elements sought by top sourcing locations in the contemporary scenario; we are young, low-cost, committed, and most importantly, rapidly growing in demand and scale. Your organization is among the first to be approached with this unique opportunity that Bangladesh has to offer. We are positive that you will be able to appreciate and assess this differentiated proposition well. As the State Minister for the sector, I commit to making this process of investment evaluation a smooth and fruitful one for you. We have not only established the machinery to support smooth investment inflow but also set it in motion to facilitate business ease. I sincerely hope this brochure serves as an initial insight into Bangladesh’s unique position in the ICT industry today. We are all extremely excited as we set course to undertake large-scale digital transformation in Bangladesh and eager to have you join us on this critical journey. Sincerely,
Talent Development Skill for the 21st century
Industry Promotion Make ICT a growth driver
Connecting Bangladesh
Connect citizens meaningfully
Digital Government Take services to citizens’ doorsteps
Zunaid Ahmed Palak MP Honorable State Minister, ICT Division
Bangladesh is the second fastest growing economy The country is experiencing an exciting phase of large-scale Digitization Fast emerging economy with a promising future
A fast growing economy
A young country
2nd
50%
highest GDP growth (~7%) globally
population under the age of 25 years
Among countries with minimum GDP of USD100Bn
A global innovator
#1 2
1
10th
largest mobile market (130 Mn users)
largest RMG exporter globally
Five Billion Dollar Opportunity Local ICT spend at $1 Bn, poised to be $5 Bn by 2025
Fastest growing ICT market @ 21% ahead of India, Philippines, Vietnam and Sri Lanka
Significant Cost Arbitrage
Bangladesh provides ~10-60% lower cost compared to peers
A surging consumer market
in Mobile Financial Services (bKash) nd
5
reasons for investing in Bangladesh
3
A bright spot with a promising future Recognized for its potential by top evaluators
Dhaka,Tier-2 locations most cost competitive
Large Talent Pool
50%+ Bangladesh population is under 25 years of age >2 Mn annual tertiary enrollments with large-scale youth skilling underway by the government
Fast Scaling Infrastructure
25+ Hi-Tech Parks planned with world-class facilities
Leapfrogging in ICT and Digital adoption
Robust supporting infra; >15k MW power capacity, > ~1.7k Gbps bandwidth
75%+
40%+
99%+
mobile penetration
internet penetration
Geographic GSM cover
130Mn+
70Mn+
98%+
mobile subscribers
internet users
Population GSM cover
5
2
Committed Government Support Customized and attractive incentive packages with dedicated Relationship Management support
4
Bangladesh offers ~10-60% cost advantage compared to peers
Local ICT spend at $1 Bn, poised to be $5 Bn by 2025 Fastest growing market (21%) followed by Sri Lanka (15%), India (12%), Philippines (11%) Public sector spending (75%)
Operating cost for a 500 FTE IT set-up
Private sector spending (25%)
Indexed Annual Operating Cost (at steady state) 0
Digital connectivity ~$1 Bn
Smart National ID ~$200 Mn
60
80
100
120
140
~$ 5 Bn
Airport Digitization ~$500 Mn+
~$ 1 Bn 2017
National Data Center ~$190 Mn
App Development and Maintenance
2025
Customer backoffice
21% CAGR
HO CHI MINH CITY
11
BANGALORE
11
122
82
27
39
111
61
19
100
70
VIZAG
9
17
65
NAGPUR
8
17
64
COLOMBO
8
91
89 Salary and benefits
Automation
23
88
57
Infrastructure costs
ERP solutions
Railway Digitization ~$70 Mn
Strong funding and partner ecosystem
“To ensure quality work and speedy output, we invite experienced global companies” – DG, Central Procurement Technical Unit
12
telecom
Manufacturing Machine Readable Passport ~$180 Mn
CEBU Digital Banking
Core Banking System
8888.88
Smart city ~$550 Mn
CBS (State Banks) ~$150 Mn
40
Banking Smart Grid ~$2-3 Bn
National IT backbone ~$360 Mn
20
“We are looking to outsource 300+ FTE worth IT/ITES services to a reputed firm” – CTO, Leading local bank
DHAKA
8
BANGLADESH TIER-2
6
13
82
50
25
44
Other direct costs
63
Salary and benefits’ is a clear lowcost driver
• Bangladesh offers the lowest entry-level salaries across delivery locations • Local talent at managerial levels adding to cost arbitrage - L3 and L4 salaries are about 20-30% lower than traditional delivery destinations
Bangladesh T-2 most competitive in infra costs
• Subsidized HTP rentals augmenting cost advantage - Rentals at approx. 15 cents per sq.ft. per month • Rentals lower than Indian principle of ‘one dollar real estate cost’ ~1/3rd of Bangalore rentals
Bangladesh to retain labor cost arbitrage going forward due to lowest wage inflation (6.3%) compared to India (9.5%), Vietnam (7.3%), Philippines (6.5%)
50%+ Bangladesh population is under 25 years of age
Existing skilled resource pool can be leveraged
>2 Mn annual tertiary enrollments with large -scale youth skilling underway by the government
Professionals working with CMMI level 5 companies and as a large freelancing community Skilled professionals
A large, young and skilled population Population under 25 years (Mn)
650
2nd youngest population
643 82
54
50
39 8
0 Philippines
Bangladesh
India
Sri Lanka
Vietnam
• Working with CMMI Level 3 & Level 5 firms • Mobile app, website, custom app developers available at scale • Experienced in BFSI, Telco & RMG clients
Java, .NET, PHP and Magento
Global project delivery for clients based out of major sourcing locations such as the US, UK
2nd most preferred after India
6% CAGR in tertiary enrollments
Annual tertiary enrollments (‘000)
10,000
+6%
5,000 0
1,582
2009
DHAkA unIVersITy
BuET
2,008
2,068
2011
2014
CuET
IuT
F&A, DBMS, Risk and Compliance
AuST
With ~65,000 receiving focused training in IT / ITES skills
• Image processing experts • Knowledge of Adobe Illustrator, Photoshop tools
TOP-UP
IT services skilling program (EY-run) Trainees: 10,000 IT & non-IT graduates Key skills: Java, .NET, PHP Collaboration with major Universities
FAST TRACK FUTURE LEADER (FTFL)
IT sector leadership building program Trainees: 1,000 IT industry professionals Key skills: IT management Collaboration w/ top sector stakeholders
FOUNDATION SKILLS
Foundation IT skills training (EY-run) Trainees: 20,000 ITeS professionals Key skills: F&A, Digital Marketing Skills benchmarked to global standards
SKILL ENHANCEMENT TRAINING
Hi-Tech Park Authority skill program Trainees: 3,000 IT industry professionals Key skills: C++, ADM, Drupal Trainings delivered online & in-person
Mid-level manager skill build (EY-run) Trainees: 500 middle managers Key skills: Project Management, SDLC Training imparted by IIT and IIM faculty
INDUSTRY ASSOCIATION SKILLS TRAINING
BASIS and BACCO skill program Trainees: 30,000 tertiary graduates Key skills: Customer support, graphic design, mobile app development
MIDDLE MANAGER TRAINING
• Skilled in non-voice BPO niche areas • Key clients across BFSI, Telco and Pharma verticals
Existing professional capabilities
Extensive graphic design capabilities
Digital marketing, ADM
Strong delivery experience in design and development projects
Seeking lucrative employment Many are students who can be hired post minimal training
Freelancing community Global brands serviced
Non-exhaustive List
25+ Hi-Tech Parks planned with worldclass facilities Significant supporting infrastructure and ICT infrastructure coverage Brick and mortar infrastructure
Customized and attractive incentive packages with dedicated Relationship Management support No Tax on profits till 2024 20 - 100% Tax discount for 10 years from start of operations in HTPs
Major highway International airport
RANGPUR
Domestic airport
Rangpur An integrated township with state-of-the-art facilities. Flanked by five Universities.
Sylhet
RAJSHAHI Rajshahi
DHAKA Kaliakair
15-storeyed multitenant building, 12-storeyed dormitory. Surrounded by tech colleges.
Jessore Khulna
KHULNA
11-storeyed building with uninterrupted electricity supply, high speed internet & data infra facilities.
CHITTAGONG
162 acres of land for setting up an office complex, sub-power station complete with fiber optical connectivity.
Barisal BARISAL
Chittagong
Custom investment support Dedicated RM, one-stop redressal portal
“ICT is a thrust sector – we are willing to give customized incentives to attract companies into Bangladesh”
~15,000 MW power capacity
key sourcing location
1.4 Kbps/¢
230% growth
8 airports, incl. 3
in last 7 years
100% VAT exemption on IT / ITES office rents
Duty free import of fixed capital and assets
and much more!
~1.7k Gbps
most value for money
100% repatriation facilities for profit and capital
10% cashback on export-oriented revenue
World-class facility with office space, shopping complex, hospital, gym and hotel. Connected to Dhaka via dedicated shuttle train service.
Supporting infrastructure and ICT
bandwidth capacity
No foreign equity limit on share holding
50% tax discount for foreign employees for first 3 years
SYLHET
Dhaka
80% VAT exemption on utilities in HTPs
28 daily flights per
international airports
- Chairman, Bangladesh Investment Development Authority (BIDA)
“Multiple government subsidies and fiscal incentives being offered to FIIs to establish Bangladesh as an alternative lowcost location”
“Bangladesh is far ahead of other emerging market countries in giving incentives to attract investors and facilitate FDI
- Global Delivery Head of a major IT, ITES company
- Everest Group
Multiple global industry leaders are seizing the Bangladesh opportunity GrameenPhone back-office
Airtel Bangladesh servicing
Long list of reputed global names already present in Bangladesh
Robust ecosystem to support this industry promotion agenda
Ministry intent on making IT an attractive investment decision for global players
Key public sector body governing fiscal and non-fiscal investment initiatives
Government agency developing and managing Hi-Tech Parks as havens for investors
Bangladesh Railways ERP
Bangladesh Investment Development Authority (BIDA)
BANGLADESH BANK
Statutory authority responsible for monetary initiatives aimed at investment promotion
Many more seriously evaluating entry into Bangladesh
Azure Data Center set-up
AWS Data Center set-up Non-exhaustive List
Government commissioned program to facilitate new investment inflow One-stop resolution window Your investment journey starts here!
We look forward to hearing from you
LICT
Name of contact point: Mr. Sami Ahmed Official email ID: ctl.lict@bcc.gov.bd Phone number: +8801913760134
BIDA
Name of contact point: Mr. Md. Ariful Hoque Official email ID: arif@bida.gov.bd Phone number: +8801711220922
BHTPA
Name of contact point: Mr. Atiqul Islam Official email ID: info@bhtpa.gov.bd Phone number: +8801712259696 / +8801713067590