ISP Industry of Bangladesh: Challenges and Future Prospects

ISP Industry of Bangladesh

Internet Service Provider or ISP provides Internet service for a variety of individuals and corporate clients. With Internet access, ISP companies offer services such as Internet transit, domain name registration and hosting, and dial-up. With the increasing internet penetration rate in Bangladesh, the ISP industry is also growing rapidly in the last few years. The number of broadband users increased especially during the Covid-19 pandemic, as reliance on the Internet kept on growing for essential tasks such as working from home, online classes, and meetings. According to BTRC, the number of ISPs and PSTN subscribers in Bangladesh till June 2019 was 5.734 million, which doubled in the next two years to over 10 million in June 2021.

Overview of the ISP Industry

Back in June of 1996, the journey of the internet in Bangladesh had started. Initially, very small aperture terminals or VSAT-based data circuit technology was used to connect to the Internet. VSAT is a data transmission technology that provides Internet access through communicating with satellites in Earth’s orbit. In the same year, to provide internet service through VSAT-BTTB (Bangladesh Telegraph and Telephone Board- which is now known as Bangladesh Telecommunications Company Limited-BTCL) granted licenses to two service providers- named ISN (Internet Services Network) and Grameen CyberNet Ltd. ISN is also said to be the first internet service provider in Bangladesh. In June 1996, they started offering the first-ever Internet services using 64 kbps VSAT technology through a Hong Kong gateway. In 2006, for the first time, Bangladesh was connected to the submarine cable ‘SEA-ME-WE 4’ (South East Asia – Middle East – Western Europe 4).

There are Four types of ISP Licenses- 1)Nationwide, 2)Divisional, 3)District, and 4)Upazila/Thana.

Later on, many ISPs started connecting to submarine cables through BTCL and the internet became more accessible and affordable for the general public. In 2017, Bangladesh got connected to the second submarine cable, ‘SEA-ME-WE 5. According to a report published in September at The Daily Star, Bangladesh currently consumes about 2600 Gigabytes per second bandwidth speed. Out of the total volume, 1,800 Gbps is delivered through the first and second submarine cables, the rest is delivered by the International Terrestrial Cable from India. Besides, BSCCL (Bangladesh Submarine Cable Company Limited) has announced to launch of the 3rd submarine cable of Bangladesh ‘SEA-ME-WE-6’ by June- 2024. BSCCL Managing Director Mashiur Rahman said that The 3rd cable will add another 6,000 Gbps bandwidth capacity. This is expected to meet the growing future demand for the internet in Bangladesh. 

Bangladesh joined to the second submarine cable, ‘SEA-ME-WE 5,’ in 2017.

BSCCL operates the international submarine cables of Bangladesh. In July 2008, this company started its operations in the country as a public limited company. In addition to submarine cables, BSCCL also serves as the country’s IIG (International Internet Gateway). IIG is basically an internet bandwidth wholesaler that provides bandwidth to ISPs. According to a report published in October 2021 in The Daily Star, currently, there are about 37 IIGs and around 2,000 registered ISPs in Bangladesh.

According to the BTRC’s Regulatory and Licensing Guideline for Internet Service Providers in Bangladesh published in December 2020, the licensing of ISPs in the country was changed to 4 categories- 1)Nationwide, 2)Divisional, 3)District and 4)Upazila/Thana. Among them, nationwide licensed ISPs will be able to provide services in any part of Bangladesh, and ISPs in other categories will provide services in their own administrative and local regions. Aamra Networks Limited, Link3 Technologies, KS Network, and BRACNet Limited are among the top nationwide service-providing ISPs. ISPs usually offer project-based Internet connectivity, along with various categories of business and family packages. For example, one of the most popular ISPs in the country- Link3 Technologies, is providing Internet connectivity to individuals across the country, as well as to companies in various sectors and government projects.

Top nationwide service-providing ISPs in Bangladesh

According to BTRC, in January and February of 2020, Out of the country’s 100 million Internet users, the number of ISP or broadband Internet users was more than 5.7 million, which increased to more than 8 million in March. It’s quite visible that in March alone, the ISPs of the country accumulated an additional 2.3 million new users. It is to be noted that in March 2020, the lockdown regarding Covid-19 was announced for the first time in Bangladesh. Since then, the number of broadband internet users in the country has been gradually increasing and in March 2021, the number of broadband internet users was more than 9.8 million. According to the BTRC website, Broadband internet users numbered more than 10 million as of October 2021.

The number of ISP or Broadband Internet users is more than 1 Crore+ in October 2021

Current Trends

Growing Individual Users

Despite being the choice of especially corporate clients and organizations, individual Internet users have been preferring broadband Internet over the past decade. Various affordable packages compared to mobile internet, and unlimited internet connectivity is the key reason for such growth of internet subscribers. Broadband internet users are increasing in the suburbs and rural areas of the country as well.

Digital Transformation

Early on, users had to deal with issues like connection, maintenance, and payment. However, now that the services of ISPs have turned more sophisticated and digitized than before, users can now make monthly payments with MFS, internet banking, and debit/credit cards. Additionally, ISP companies have dedicated websites or apps offering access to many of their services that also enable customers to post any grievance.

Ek Desh Ek Rate

According to TBS, in June 2021, the BTRC announced the program ‘Ek Desh Ek Rate’ to provide affordable broadband internet services to marginalized areas of the country. As part of this plan, for the first time, area-based tariff rates were fixed for NTTN (Nationwide Telecommunication Transmission Network) and IIG operators. According to the tariff plan, a maximum of BDT 500 will be charged at the union levels. Also, the price of 10 Mbps internet has been fixed with a range of BDT 800 to 1000, and the price of 20 Mbps has been fixed with a range of 1100 to 1200 BDT.

Value-Added Services

In addition to the Internet connection, Internet service providers are offering many additional features, such as access to various movie or TV-streaming servers, and dial-up services. Moreover, they are offering access to domestic and foreign OTT platforms as well. For example, the country’s popular ISP- Amber IT is offering subscriptions to on-demand video streaming platforms like Bongo, ZEE5, Hoichoi, and Eros Now with their home packages. Some other ISPs also offer different value-added services like CCTV IP Surveillance, IP Telephone, Corporate IP, VPN Service, Storage or Hosting, etc. Package prices vary based on speed, coverage, and extra service


The Dominance of Mobile Internet

Mobile internet providers still dominate when it comes to subscriber count and penetration rate. According to BTRC, by the end of October 2021, the number of mobile Internet subscribers is about 119.1 million amongst total internet subscribers of 129.2 million, while the number of ISP and PSTN subscribers is just over 10 million. In other words, around 92.20% of the country’s Internet subscribers are still using the mobile Internet. Referring back to BTRC again, Bangladesh’s mobile internet penetration rate is around 68.82%, while broadband is still lagging far behind with a rate of only 5.62%.

Lack of Infrastructure

Due to weak infrastructure in most rural areas of the country, ISP companies have yet to reach and expand their services in those areas. Though individual broadband usage continues to grow in cities or metropolitan areas of the country, most villages or unions are still lagging far behind resulting from the lack of infrastructure for bandwidth expansion. Besides, all the unions are yet to be facilitated with fiber optic cable. Industry insiders blame the less developed infrastructural conditions responsible for issues like expensive broadband internet prices and slow internet speeds.

Lack of Proper Policy

The country still lacks policies dedicated to managing ISPs in an organized manner. Despite having introduced several policies recently, BTRC lacks the required infrastructure and manpower to oversee these issues across the country. According to Imdadul Haque, the General Secretary of ISPAB (Internet Service Providers Association of Bangladesh), the fact that number of ISP licenses is increasing every month but the number of customers is not increasing accordingly, which is causing unhealthy competition. On top of this, problems such as irregularities in bandwidth transport fees, providing low-speed internet to customers, additional connections, and subscription fees are on the rise. According to a report published in Prothom Alo, Bangladesh ranks 58th in terms of global broadband internet price. On the other hand, according to the Ookla report of the same month, Bangladesh was ranked 135th out of 137 countries in terms of internet speed.

Shared Internet Access

ISPs usually provide users with two types of connection access, Dedicated Internet Access, and Shared Internet Access. In the case of Dedicated Internet, the customer is provided with a private connection, the bandwidth of which is not shared with anyone but that user. As a result, the user gets proper speed. On the other hand, ISPs provide internet connectivity to multiple users through the same bandwidth in shared internet access resulting in a reduced subscription fee but with a relatively lower connection speed. As a result, even though the monthly charges of the customers are reduced a lot, the speed becomes quite slow due to a large number of customers using those connections at the same time. Adopted this strategy by many the ISPs, fail to ensure the possible best customer experience.

Unhealthy Competition

According to BTRC, many individuals and organizations in the ISP industry are illegally providing internet services. These illegal ISPs are causing issues like slow internet, high price, bad service, and unhealthy competition. In addition, Users are suffering in terms of services and prices as ISPs are under the control of politically influential people at various local levels including villages, unions, and Upazilas and the good ISP services are not able to expand their services in those areas

Problems occurred by illegal ISPs.

Limited Internet Bandwidth

With the current capacity of bandwidth production in Bangladesh, even though it is possible to meet the demand till the year 2022, the providers may face a bandwidth shortage in the following years. Industry insiders expect the problem to ease somewhat after the installation of the 3rd submarine cable in 2024, but it is quite challenging for the industry to meet the demand till then.

Opportunities & Suggestions

According to BTRC, IIG offices have been directed to be set up at the district levels by December 2021, and services will be expanded at the Upazila and Union levels soon. Internet users in the country are now increasingly turning to live and streaming activities for gaming, entertainment, and shopping, which is expected to increase further in the future. That in turn will increase the use of broadband internet. If payment gateways are made easier and more available, that may attract more individuals to use broadband internet.

Leave a Comment