Submarine Cable plans to sell bandwidth to Italian firm at low price

Questions have been raised over a move by Bangladesh Submarine Cable Company Ltd (BSCCL) to sell off half of its capacity to an Italian company at a very low price.

BSCCL has sent a proposal to the post and telecommunication division for approval to sell half the capacity of the SEA-ME-WE-4 cable to Telecom Italia Sparkels.

In February, the BSCCL board decided to sell four million MIU*km (minimum investment unit), which is equivalent to around 90 Gbps, at a price of Tk 16 crore for the rest of the lifetime of the cable. A submarine cable usually lasts 20-25 years, and this cable has been in operation since 2006; so, the Italian company may be looking to use the cable for 11 to 16 more years. 

In addition, Italia Sparkels will pay BSCCL Tk 48 lakh a year to bear maintenance costs, as Bangladesh is still a member of the consortium -- SEA-ME-WE-4.

At present, BSCCL has a total capacity of 8.9 million MIU*km, which is equivalent to 200 Gbps.

The BSCCL cable is connected from France to Singapore and it is easy for the company to sell out capacity or connectivity from anywhere on this route.

However, telecom division officials and analysts are also raising questions over the bandwidth price and capacity. 

The Italian company's price is around 60 times lower than the bandwidth export price to India, officials added.

“It seems like a loss, but as a lot of our capacity is unused and we are wasting the opportunity, whatever we can earn through the deal will benefit us,” Monowar Hossain, managing director of BSCCL, said recently.

Two years back, the government gave BSCCL a directive to lease or sell half of the cable's capacity, but a buyer could not be found, he added.

Businesses in the internet protocol (IP) industry said this is a shocking move; they are ready to offer the same price to buy the capacity, which would help internet users in the country. 

“This is an unbelievable price and we are ready to pay this price anytime,” said Sumon Ahmed Sabir, chief strategy officer of Fiber@home Ltd.

Although BSCCL is planning to sell it at a very low price, when local companies approach them, they always quote high prices, he added.

“Give us the scope and we will offer high speed internet at a cheap rate,” Sumon said. 

Some senior officials of the telecom division said they are not in favour of giving the control to another company by selling off half the ownership of the cable; rather, leases can be offered.

The proposed price is also much lower than the bandwidth lease price to eight Northeastern states in India, the officials said.

The cabinet recently approved the deal with India that is expected to be signed this month. The rent will be $100,000 for 10 Gbps a month. 

This will initially be a one-year contract, with an option to renew every year. 

The deal will be signed with Bharat Sanchar Nigam Ltd, and BSCCL will be able to earn $1.2 million (around Tk 9.42 crore) a year from it. 

Md Faizur Rahaman Chowdhury, secretary of the post and telecommunication division and chairman of the BSCCL board, said: "If we sell the capacity, the country will lose ownership and control over the cable."

Bangladesh was connected to SEA-ME-WE-4 in 2006 at a cost of $63 million; BSCCL earned the amount back in three years and whatever they are earning now is their profit, officials said.

Within two years, BSCCL will connect with SEA-ME-WE-5 and obtain an additional 1,300 Gbps of bandwidth, Hossain added. "We will not have a scarcity of bandwidth then."