Digital Investment Summit Adds Confidence to ICT Sector

My morning started very early around 7:45am for a meeting with a startup. The meeting lasted over an hour and before heading out to Digital Investment Summit, I checked the road condition in GoBD APP. My business partner Samad Miraly and I shared a ride, attempting to be green whenever possible. The traffic was relatively light so we reached the venue, Radisson Hotel in a short time.

 

first panel

At the reception area we met up with familiar faces; after quick hellos and round of handshakes we parked ourselves at the third row from the stage.

The event started on time with the welcome speech from Jon Fredrik Baksaas, President & CEO, Telenor group. Then subsequently Shameem Ahsan, President of BASIS, Zunaid Ahmed Palak, State Minister, MoPT& IT, Sajeeb Ahmed Wazed, ICT Adviser to Prime Minister spoke about the progress Bangladesh made in the ICT sector.

There were more speakers from Google, World Bank, Huawei Technologies Co. Ltd, a2i, Accenture, Telenor, and BASIS who spoke in various sessions throughout the dayAfter the first break, my other business partner Fayaz Taher joined. Between our tweets and FB posting about Digital Investment Summit, we networked with some interesting people.

 

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Here are few key sound bytes from the event:

Jon Fredrik Baksaas, President & CEO, Telenor group.

“Nokia at one point was the world leader in mobile phone but because of superior user experience delivered via smart phone, that leadership was moved to Apple.”

The reference was made to explain how any country, in our case, Bangladesh has the potential to displace or create market dominance in the new digital frontier by creating a superior service offering.

 

Telenor CEO

 

He went on to say that Finland after losing the smart phone battle was able to redirect that talent for creating world’s leading online game development companies. So ultimately it boils down to having imagination that matches the ambition of the country, and he was confident that Bangladesh could curve out a niche in the digital space.

Mr. Basksaas said Telenor has a vision to empower society and they believe that technology helps achieve that. He stressed on the fact that while it is importance to work on the ICT use inside the country to develop different sectors, he also advised to work on the potential of building a new export industry. He believes that the potential of running global processes from within this country exists from the local competent base. GPIT, which was acquired by Accenture, is prime example of that talent base. In order to tap into that talent base one needs to organize and professionalize it first, he added.

Sajeeb Ahmed Wazed, ICT Adviser to Prime Minister

Sajeeb Wazed

“After electricity, second backbone of Bangladesh is its digital communications. And mobile has played a crucial role in that with coverage of 99% of the country which by the way is one of the highest in the world.”

 

To drive the high data connectivity Mr. Wazed stressed the importance of 4G & LTE and he hoped that the spectrum auction would happen next year to make that a reality for 40 million Internet users. He pointed out that the government is revamping the National Tele Communication Policy and one of the fundamental tenet would be to have “technology neutrality” to keep all technology options open for local operators.

Mr. Wazed went to say that by working closely with Security & Exchange Commission (SEC), the government to allow direct foreign investment in the capital market by allowing foreign mutual fund operating directly in Dhaka Stock Exchange. This will enable to create a source of capital for Telecom & IT sectors, which will be first for Bangladesh.

He also shared that by end of this year, by working with SEC, the government plans to establish small to medium cap exchange, specifically for the IT industry (as these companies do not have large capital investment base). This will enable IT companies to raise capital from the equity market that exists in many other countries.

Zunaid Ahmed Palak, State Minister, MoPT& IT

Zunpalak

In Bangladesh the SEC requires a minimum of BDT 40 core annual turn over for companies to be enlisted in the stock market. Mr Palak said that most of the local ICT companies do not fulfill that requirement so they will look into easing some of that cap for easier enlistment in the stock exchange. As pointed out in World Bank’s presentation at the Digital Investment Summit that world’s total digital commerce is valued at US$20.4 trillion dollars and out of which US$16 trillion dollars is driven by e-commerce transaction.

Bearing the importance of e-commerce in developing over all ICT sector, Mr. Pallak mentioned that he is working with Finance Ministry and NBR to withdraw VAT from online transaction from this years budget, however the proposal is still under review.

He further added that in order to encourage local entrepreneurs and IT companies they will revise the public procurement policy and relax some of the stringent requirements for participating in tenders. He also shared another important announcement of Tax exemption for IT companies being extended from current 2019 to 2024. He is hopeful that it will be implement in budget this year. He mentioned to further attract foreign direct investment; government will enact Venture Capital (VC) policy in a very short time to support the VCs.

Sami Kizilbash, South Asia Emerging Markets, Google

Sami talked about key research insights and trends about Bangladesh online users, which were based in TNS research report. He cited four key online behaviors:

1. Bangladeshi are very active in social media and 60% of them are communicators or influencers 82% of usage is for social media, 46% for news& sports, 39% is email, Media & entertainment is 38%

2. Spend as much time watching TV as online.

3. Access internet primarily from mobile devices.69% of users spend mobile internet daily and 60% use mobile to access internet

4. Users want to shop online but they do not use internet primarily because it is not possible to buy online, users are not confident about security aspect of shopping online and finally they were not aware of the online shopping options (20%).

panel picture

He then talked about the influence or effect of online advertising on local users. 32% of users recall watching an online advertisement which led to 3 actions. 82% of users went to the product site to research and review, 35% took offline action like going to actual physical store and 17% actually bought the product.

 

Shameem Ahsan, President of BASIS while speaking at the event said under his leadership BASIS went to many parts of the world to tell the story of Digital Bangladesh. He said that BASIS is actively trying to sell the potential of local ICT sector to international investors and partners. Mr. Ahsan is hopeful that Digital Investment Summit will resonate with investors and help project Bangladesh as an attractive investment destination for ICT.

 

When asked Russell T Ahmed, SVP of BASIS about objective of the event, he said that Bangladesh at this point of time needs Infosys and Wipro of its own. Our current ICT companies are small and it needs investments not only from outside but also from local blue chip companies. He said that through this event if they can get attention from the local large congloremates and draw investment in this sector, it may start a new kind of tech revolution.

 

Samad, co-founder of SD ASIA said, “ When we made the Startup Dhaka documentary two years ago, we emphasized Bangladesh’s potential in the tech industry, but today’s summit showed real progress. I am excited about the future.”

I personally felt that it was a well-organized event and I convey my congratulations to Telenor, Accenture, BASIS and ICT Division for arranging an important and thought provoking event. While I was not able to capture all the talking points in this article, SD ASIA will bring subsequent stories on Digital Investment Summit. So please look out for the next article from this series.

Mustafizur Rahman Khan

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