Bharat Sanchar Nigam Ltd (BSNL), a state-run Indian telecommunication carrier, is struggling to afford importing internet bandwidth from Bangladesh and will suspend its deal with the country in February after four years of doing business.
The carrier has been struggling with mounting unpaid staff salaries and vendors’ payments for nearly a year. Now it has decided to stop buying bandwidth from Bangladesh for its market in Northeastern India as a desperate austerity measure.
The ailing Indian company has recently informed Bangladesh Submarine Cable Company (BSCCL) that it would discontinue the business deal from February next year, Mashiur Rahman, managing director of BSCCL, told The Daily Star.
In June 2015, the Indian company signed the agreement to take 10 gigabits per second (Gbps) of bandwidth for Tripura from Bangladesh through Akhaura-Agartala point.
The bandwidth export began on February 8, 2016. Initially, the price was $10 per Mbps and BSCCL earned Tk 9.6 crore in the first year. Later, the price was revised down twice to bring it to $6 per Mbps. Still, BSNL has been unable to pay dues since September 2018.
The deal will be over on February 8 and the bandwidth transmission to India’s Northeastern state of Tripura will be suspended on the same day, said Rahman.
The Indian company owes Tk 6.39 crore to BSCCL and Rahman said they are not sure how they would recoup the dues.
But when the deal was struck, BSNL had said it wished to increase its bandwidth intake up to 100 Gbps within a year, according to Rahman. But BSNL never consumed 10 Gbps bandwidth despite huge demand in Tripura. India’s private sector has outplayed BSNL, whose consumption has never exceeded more than 8 Gbps.
BSCCL was receiving Tk 5.46 crore annually from its business with BSNL, whereas there are local clients in Bangladesh that contribute about Tk 50 crore in revenue to the lone submarine cable company in Bangladesh.
“So, business-wise, it was not so big, but it was a matter of pride for the country,” Rahman said.
Posts and Telecom Minister Mostafa Jabbar said he has no knowledge about the recent development but if the neighbouring country discontinues the business it will not be a matter of concern for BSCCL.
BSCCL now supplies about 800 Gbps of bandwidth to the local market and another 600 Gbps is coming from India through the western border of Benapole, he said.
“Therefore, 10 Gbps is tiny volume and we shouldn’t be worried about it,” said Jabbar.
BSCCL is a profitable company and raked in Tk 58.58 crore in net profits in 2018-19 fiscal year. Its revenue will grow in the coming days, the minister said.
“When we commenced exporting the bandwidth, Tk 10 crore mattered, but at this moment, Tk 6 crore is not a big issue for BSCCL.”
BSNL has been reporting losses since 2010, and the loss is estimated to balloon to 14,202 crore rupees in FY19, according to a report of Indian news agency Business Standard.
The public sector firm’s provisional loss was 4,859 crore rupees in 2015-16, which was 4,793 crore rupees in 2016-17, and 7,993 crore rupees in 2017-18.
Rahman said though BSNL asked to discontinue the deal, the state governments of Meghalaya and Assam are contacting them to import a huge volume of bandwidth.
“One of the consultants of the state governments has already sought a proposal from us and a Bangladeshi company is in talks with us to fast-track the process,” he added. The government owns 73.84 percent stake in BSCCL, a listed company, while institutional investors own 11.20 percent, foreign investors 3.03 percent, and the general public 11.94 percent.
It currently has two undersea cable connections – SEA-ME-WE 4 and SEA-ME-WE 5 – with a combined capacity of 2,600 Gbps. The state-owned firm is now planning for a third cable to meet the growing demand.