A seminar paper on The Business Opportunities and Constraints within the IT and Telecommunication Industry: A Study in Sylhet.

Course Title : Seminar and Viva Voce

Course Code : BAN 200 Submitted To: Tahsina Haque Simu Lecturer Department of Business Administration Shahjalal University of Science & Technology, Sylhet.

Submitted By: Md. Mizanur Rahman Anik Dhar Mohammad Tanvir Hossain Munna Josim 2008731001 2008731004 2008731033

Date of Submission: Department of Business Administration Shahjalal University of Science & Technology, Sylhet. This seminar paper has been prepared for submission into the Department of Business Administration, Shahjalal University of Science & Technology, Sylhet, as a partial requirement for fulfillment of BBA Program.

Acknowledgement

This research paper is on The Business Opportunities and Constraints within the IT and Telecommunication Industry: A Study in Sylhet. We take this opportunity to express our gratitude to all those people who have been instrumental in making our research successful. A number of individuals have contributed to this research. To name only a few of them would be a farce, instead, we express our sincere attitude to all of them. We owe a special thanks to our respective teacher Tahsina Haque Simu, Lecturer, Department of Business Administration, Shahjalal University of Science & Technology, Sylhet who is our supervisor in this research work. She has always been a source of great help, suggestions, guidance and inspiration to us. We would like to thanks Prof. Dr. Md. Nazrul Islam, Head, Department of Business Administration, Shahjalal University of Science & Technology, Sylhet and Nayeema Ahmed, The Chairman of Seminar Paper Evaluation Committee for steering the conduct of the examination and evaluation of our course BAN 200. We are also grateful to our loving friends and seniors for their generous help to making suggestion and exchanging view with us. We sincerely appreciate the staff of Department of Business Administration for their numerous assistance. To make this research we used hordes of journals, magazines, newspapers, books, website etc. We sincerely admit their contribution. Thanks to everyone who contributed to our research paper.

Letter of Certificate

I am immensely pleased to declare that the group of students has been given with the topic The Business Opportunities and Constraints within the IT and Telecommunication Industry: A Study in Sylhet. for researching and preparing the paper on this subject. They have reviewed all the relevant literature and surveyed a good number of both primary data and secondary data. I have supervised them throughout the preparation of the paper. I also certify that the paper is an original one and has not been submitted also previously for publication in any form. They are wished all the best in their efforts.

...................... Tahsina Haque simu Lecturer Department of Business Administration Shahjalal University of Science & Technology, Sylhet.

Letter of Submittal May 12, 2010

To Tahsina Haque Simu Lecturer Department of Business Administration Shahjalal University of Science & Technology, Sylhet. Subject: Submission of the Seminar Paper. Dear Madam, We have honor to submit the seminar paper as a part of BBA program to you that we are assigned to prepare under your direct supervision on the topic entitled The Business Opportunities and Constraints within the IT and Telecommunication Industry: A Study in Sylhet. We would like to thank you for approving this significant topic. We may note here that there has been no dearth of sincerity on our part to bring the issue under study in to proper focus. Based on our works we have prepared this seminar paper that describes the assign topic perfectly. According to our conscious and conviction writing such a seminar paper that will enrich our knowledge regarding real world situation in our future career. We will highly appreciate if you kindly accept the report. Your positive actions regarding this matter would be very much helpful for our academic performance. Sincerely Yours Md. Mizanur Rahman Tanvir Munna Anik Josim Executive Summary 2008731001 2008731007 2008731009 2008731013 2008731025

Content

Chapter One Introductory Part Topics: 1. 1Background of the Study

1.2 Objective of the study 1.3 Scope of the study 1.4 Review of the literature 1.5 Research Methodology 1.6 Limitation of the study

1. 1Background of the Study In modern age IT and Telecommunication is a buzzword for all developed and developing countries. Because it is just not a part of the business for income of nations, it is a power on which developments run smoothly. Yes, IT and Telecommunication is that kind of instrument by which standard living condition and development can be ensured. Without IT and Telecommunication sector developments never are imagined by any developing countries.

Because grow of the IT and Telecommunication business not only ensures development but also ensure the reduction of poverty and unemployment. Now-a-days IT and Telecommunication business has kept the economy of Bangladesh more dynamic for that reason government declares it as thrust sector. The one of our source of national income is export IT and Telecommunication software. By exporting IT and Telecommunication software, our country receives huge amount of remittance in every fiscal year from different countries. The IT and Telecommunication business plays an important role on the reduction of unemployment, poverty and develop our countrys living standard. So the importance of IT and Telecommunication business in the economy of Bangladesh is widely recognized and requires little reiteration. This study attempts to identify key issues regarding the opportunities and constraints of IT and Telecommunication business in Sylhet. We have first discussed the overview of IT and Telecommunication business in Bangladesh as well as Sylhet. According to the study based on Sylhet, we have categorized the business in four market segment. With the advantage of earlier initiation, the computer hardware segment dominates the market share (40 per cent) while the relatively late entrant, software segments command about (18 per cent) of the total market. The Telecommunication and Network Hardware segment (29 per cent) and Internet and Network Services (13 percent) make up the remaining part of the market. Then we studied the opportunities and constraints of the IT and Telecommunication industry in Sylhet. Addition to this, we have made a survey on sixty eight respondents in Sylhet to get the actual view of overall situation. The following section explains the observational methods that were employed to capture the concurrent opportunities, weakness, strength and constraints in our study. The next section present results from the observation and monitoring study. And then the final section describes the recommendations of the studys results. This study argues that IT and Telecommunication business is a crucial business sector of the current situation of the Sylhet, because of the immerging the city in a new way. How smoothly the investors can take the opportunities and reduce the constraints of the existing business of IT and Telecommunication. Our article describes massive impact of opportunities and constraints of the business sector development of the IT and Telecommunications and by the way development of the

economy. To figure out the level of uses, we identified some features of opportunities and constraints that will act as the parameter of triumph of IT and Telecommunication industry in Sylhet. Our empirical data illustrate the scope of opportunities and reduction of constraints within the industry. A secondary aim of this article is to point out the dilemma of investment and to improve the mutual condition on the overview of the IT and Telecommunication sectors opportunities and constraints within its industry in our area of study.

1.2 Objective of the Study Before any work, setting up objective is half of completing the job. The reason behind conducting this study is clear and was motivated towards the achieving of good. The objective of this research work is given below: 1. To gather enormous knowledge of IT and Telecommunication business. 2. To find out the economic contribution of the IT and Telecommunication business.

3. To understand the business opportunity and constraint within the IT and Telecommunication industry.

1.3 Scope of the Study The scopes of learning this research paper are: 1. The potential investor of business enterprise can know the opportunity and constraints of IT and Telecommunication business in Sylhet. 2. The prospective business investors can get idea about the present condition of IT and Telecommunication business and built up the strategy. 3. We have mentioned various constraints faced by business and also mentioned the process of how to overcome their constraints and take the opportunities which are helpful for the investors.

1.4 Review the Literature The business opportunities and constraints within the IT and telecommunication industry is an important contemporary issue. To get a clear idea about this subject, the definite area is the deep analysis of the obtained information from books, newspapers, magazine, website, journals, articles, prospectus individuals and so on. Basically any type of study, thesis or research is made on the basis of acquired information from two main sources. There are primary and secondary sources.

In case of our research about The Business Opportunities and Constraints within the IT and Telecommunication Industry: A Study in Sylhet primary sources are surveys conducted in various places of the Sylhet Metropolitan City and a number of expatriate and relevant information obtained from internet. On the other hands, information and data are collected from various journals; books and prospectus are used as secondary sources. In order to make the study effective and meaningful, sufficient numbers of graphs are added thereon. ICT Sub Sector Study in Bangladesh a research paper published by IRIS, University of Maryland shows the estimated it and telecommunication human resource demand over the next five years, networked readiness index. The Telecommunication Sector in Bangladesh by European Commission reported the size and nature of the telecommunications and information technology sectors, list of major local companies and review of their existing collaborations with foreign firms, analysis of import and export flows, problems encountered by internet service providers (ISPs). A report of Bangladesh software industry and its dynamics included in the Software Product Catalogue (2006) published by the Bangladesh Association of Software and Information Services (BASIS) states that the total IT and Telecommunication market size in Bangladesh is USD 160 million and the approximate GNI from IT and Telecommunication market sector comes to 0.002 per cent of the total GNI. The export earnings from software for year 2005-06 are very nominal 0.0004 per cent of the total GNI. According to the Bangladesh Bank source, export earnings from Software and ITES was USD 27.01 million in the fiscal year 2009-10 registering a high growth of 113 per cent from the previous year. According to industry experts (BASIS leaders), the recent development in joint ventures and business collaborations among foreign companies and Bangladeshi software companies would assist significantly in sustaining the enviable growth in the export earnings. Some of these projects are already in place and many others are either in the pipeline or perceived to be coming in the near future. Another factor that has contributed to the recent high export growth is the influence of the multinational telecom companies.

These companies while operating in Bangladesh utilized the local IT sector for many of their international projects giving a good software export opportunity for Bangladesh. At present, there are about fifty companies in the country engaged in exporting software and ITES to thirty countries across the globe. The export destinations are USA, Canada, EU countries, Middle East, Japan, Australia, South Africa and some South East Asian countries.[ According to BASIS survey (2010) [152 BASIS members and non members companies were surveyed]

1.5 Research Methodology (1) Research Design: The research design was descriptive and analytical to find out actual data because we have strived for better recommendation. Information related with IT and Telecommunication business including their investment, returns, number of employees, government and other support, advertisement, genre of customer, problems regarding business, assorted barriers and their initiative to develop business and so on.

(2) Study Area: To execute the study and to ensure its value, it is very important to select a study area. For this research, we purposively select the registered business firm in the Sylhet Metropolitan City, because these firms are related with the IT and Telecommunication Business. (3) Population of the Study: All registered business firms which are related with IT and Telecommunication Business in the Sylhet Metropolitan City are considered as a research population. (4) Unit of Analysis: Every registered business firms which are related with IT and Telecommunication Business in the Sylhet Metropolitan City, is the unit of analysis. (5) Sampling: Random Sampling (Probability Sampling) is used for the study. Twenty Seven computer hardware, twenty telecommunication and network hardware, nine internet service providers and twelve software development firms have selected as sample. After selecting first sample every three member family (sample interval) is selected from the list. Sample Interval = Population / Sample Size = 231/68 = 3.40 (6) Sample Size: Sixty Eight IT and Telecommunication firm have selected from total Two Hundred Thirty One from the Sylhet Metropolitan City.

Here, N = Sample Size n = Population t = Two sided normal variant value at 95%c Confidence Level (1.96) p = 0.5 q = 1-0.5 = 0.5 d = Standard Error (10%)

(7) Methods of Data Collection: The information is collected by a structured questionnaire from respondent through survey method. Open and closed ended question have used and here information has been collected through face-to-face interview. And we collect the secondary data from various journals, magazines, documentaries and websites especially from Bangladesh Computer Society, Ministry of Finance, Bureau of Statistics and Asia Invest etc.

(9) Techniques of Data Analysis: We have collected data from primary and secondary sources. For primary data we tabulated the classified data. Analysis work after tabulation is generally based on the computation of various percentages. In the process of analysis, relationship or differences supporting or conflicting with original or new hypothesis should be subjected to test of significance to determine with what validity data can be said to indicate any occlusion. The collected quantitative data (Primary Data) is analyzed through the MS Office Excel 2007 and SPSS 12.0 application software.

1.6 Limitation of the study It is required relevant data to make any paper successful and meaningful. In our primary data have been recorded about calculated numbers of respondent. It was hard to talk with respondent due to time limitations that eventually limit the paper in the relation of the world. Collecting the primary data was very rough and tough, because most of the respondent was not agree to talk frequently rather they were hesitating while making the survey and it was found that the wants vary from respondent to respondent, so decision making about the report was so tough. This research work required a large number of days than we got to present the huge information. We can summaries our limitation of the study as follows:

1. Lack of experience in related field. 2. Collection of primary data was very difficult to obtain because most of the respondent were insisted to reveal the secrecy. 3. Our time and budget were limited.

Chapter Two Concept of IT & Telecommunications Business and Other Components 2.1 Information Technology (IT) 2.2 Telecommunication 2.3 Labor force 2.4 Infrastructure 2.5 Hardware and Technical Back-Up 2.6 Industry Competencies

2.7 Local Market Opportunities

2.1 Information Technology (IT) Information Technology (IT) is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications. Information Technology (IT) is the area of managing technology and spans wide variety of areas that include but are not limited to things such as processes, computer software, information systems, computer hardware, programming languages, and data constructs. In short, anything that renders data, information or perceived knowledge in any visual format whatsoever, via any multimedia distribution mechanism, is considered part of the domain space known as Information Technology (IT). Information technology is starting to spread further than the conventional personal computer and network

technology, and more into integrations of other technologies such as the use of cell phones, televisions, automobiles, and more, which is increasing the demand for such jobs. Information Technology (IT) consists of all technical means used to handle information and aid communication, including: (i) Computer Hardware: Hardware is a general term for the physical artifacts of a technology. It may also mean the physical components of a computer system, in the form of computer hardware. Hardware historically meant the metal parts and fittings that were used to make wooden products stronger, more functional, longer lasting and easier to fabricate or assemble. Modern hardware stores typically sell equipment such as keys, locks, hinges, latches, corners, handles, wire, chains, plumbing supplies, tools, utensils, cutlery and machine parts, especially when they are made of metal. (ii) Internet Service Provider (ISP): Internet service provider (ISP) is a company that provides access to the Internet. Access ISPs connect customers to the Internet using copper, wireless or fiber connections. Hosting ISPs lease server space for smaller businesses and host other people servers (collocation). Transit ISPs provide large tubes for connecting hosting ISPs to access ISPs. ISPs employ a range of technologies to enable consumers to connect to their network. For users and small businesses, the most popular options include dial-up, DSL (typically Asymmetric Digital Subscriber Line, ADSL), broadband wireless, cable modem, fiber to the premises (FTTH), and Integrated Services Digital Network (ISDN) (typically basic rate interface). For customers with more demanding requirements, such as medium-to-large businesses, or other ISPs, DSL (often SHDSL or ADSL), Ethernet, Metro Ethernet, Gigabit Ethernet, Frame Relay, ISDN (BRI or PRI), ATM, satellite Internet access and synchronous optical networking (SONET) are more likely to be used. (iii) Software Development: Software is a collection of computer programs and related data that provide the instructions telling a computer what to do and how to do it. We can also say software refers to one or more computer programs and data held in the storage of the computer for some purposes. In other words software is a set of programs, procedures, algorithms and its documentation. The term was coined to contrast to the old term hardware (meaning physical devices). In contrast to hardware, software is intangible, meaning it "cannot be touched". Software is also sometimes

used in a more narrow sense, meaning application software only. Sometimes the term includes data that has not traditionally been associated with computers, such as film, tapes, and records.

2.2 Telecommunication Telecommunication is the transmission of information, over significant distances, to communicate. In earlier times, telecommunications involved the use of visual signals, such as beacons, smoke signals, semaphore telegraphs, signal flags, and optical heliographs, or audio messages via coded drumbeats, lung-blown horns, or sent by loud whistles, for example. In the modern age of electricity and electronics, telecommunications now also includes the use of electrical devices such as telegraphs, telephones, and teletypes, the use of radio and microwave communications, as well as fiber optics and their associated electronics, plus the use of the orbiting satellites and the Internet. 2.3 Labor force Bangladesh enjoys a clear competitive advantage in its IT labor force. The leading universities in the country provide world class IT courses [In Sylhet, Shahjalal University of Science & Technology (SUST)]. Each year, various institutions produce about 2,000 IT graduates. In addition to that, a huge number of non-IT graduates are working in the sector as well. The most significant advantage of the Bangladeshi workforce is the low wage rates. The salaries for IT professionals could be as low as USD 75/month. On the other hand, the higher salary ranges at approximately USD 1,000-1,200/month. The quality of the graduates coming out of various institutions is satisfactory. Bangladeshi students have proved their potentials in the international competitions by winning a number of programming contests. However, the available workforce is still not adequate to meet the industry demand. According to Mr. Fahim Mashroor Chowdhury, CEO, Bdjobs.com (BASIS director as well), each year the industry faces a shortage of about 1,800 to 2,600 professionals. He identified the brain drain and a perceived lack of career prospects as the two major reasons for this short fall. Along with other industry experts, he suggested improving the industry-academia collaboration to produce the right people for the right jobs. 2.4 Infrastructure Bangladesh has been building its infrastructure support for the IT industry over the years. This year, the country ensured global connectivity by connecting to the Information Super

Highway through SEA-MEA-WE 4 consortium. High-speed Internet connectivity through fiber optic cables costs about USD 2.67/per month for 1 kbps connection. The existing VSAT backbone will continue to remain the major Internet infrastructure until the new Backbone (Submarine Cable Connectivity) operates 100 per cent. There are as many as 150 ISPs (In Sylhet 09 ISPs) in the country and the competition among Internet service providers has resulted in significant improvement in their services. Most of the ISPs are now providing 24/7 on-site technical support. In relation to infrastructural weaknesses, all the stakeholders identified stable electricity as the top priority. In general, the country lacks adequate electrical supply. The companies operating in Bangladesh, therefore, must make alternative arrangements to ensure smooth power supply; this has developed a strong market for alternative power equipment in the form of UPS (Uninterrupted Power Supply) and IPS (Instant Power Supply). For smaller projects, the cost addition due to power shortage may not be significant, but for larger projects the cost of a project may increase for this reason. 2.5 Hardware and Technical Back-Up According to research by Springboard Singapore, the volume of the hardware market in Bangladesh is USD 129.4 million at present. Locally assembled and often unbranded machines dominate the pc/server market. However, most of the international giants (HP, IBM, and Dell etc.) are present in the market through their local agents. The cost of a PC or server in Bangladesh is in line with world market prices. A branded server with basic configuration costs about USD 6000 whereas the unbranded version costs about USD 2,000. The average workstation price is USD 700-900 for a brand PC and USD 500-600 for a clone PC. After sales support of the hardware is satisfactory. Most large organizations usually go for AMCs (Annual Maintenance Contract) with the vendors. The AMC is customizable in accordance to the clients need. However, the local vendors are of the opinion that an international warranty is not always suitable for clients of brand equipment. Their logic is that the designated vendors (local agents) would always keep their direct customers on their priority lists. Additionally, the international warranty does often not make them directly obligated to provide local support. 2.6 Industry Competencies As stated in earlier section, cheap labor is the biggest competency for the Bangladesh IT and Telecommunication industry. The skilled labor force is easily trainable and quick learners.

They also show greater commitment to specific areas of concentration provided the employers carefully build the loyalty. The industry experts opined that the geographical location of the country is suited to reach out to other markets in Asia. Additionally, India is moving to higher strata of the global IT market, which has created an opportunity for Bangladesh to capture the lower niches (left by India) of the market. Bangladesh does have willing investors with comprehensive local business knowledge. The investors in other sectors (textile garments etc.) have proven their competencies in international business. They are good at spotting new business opportunities and implement them efficiently. The favorable government policy for the IT and Telecommunication industry is attracting these investors towards this sector. With their accomplishments in international businesses, they could become the ideal strategic partners for international companies intending to venture into IT and Telecommunication industry. 2.7 Local Market Opportunities In recent times, Bangladesh has become one of the prominent outsourcing destinations in the world. The telecom boost in the country presents another opportunity for the IT companies as support service to the telecom companies. The major focus of the telecom opportunities lie in the form of mobile content development and value added service solutions. The government is yet another big opportunity that is worth pursuing. To act on its declaration of IT and Telecommunication as thrust sector, the government is seriously taking initiatives towards public IT projects. The focus of these projects is in the form of e-governance and office automation. The SME sector in Bangladesh has the potential to become a lucrative market niche for the foreign companies. According to a survey report (by BASIS-KATALYST), the latent IT/ITES demand of the specific SME segments is about USD 17.94 million. The report also suggested that demand is gradually growing along with the increase in the awareness level of the SME entrepreneurs. The opportunities exist without any doubt. Moreover, foreign companies are making use of these opportunities already. The successful companies in identified preplanning and marketanalysis as two of the major success factors for new companies entering the IT and Telecommunication industry.