Funds pour into telecom, data processing

Investment in some industries, including data processing and telecom, has been rising significantly although the trend of overall investment is still sluggish.
Opening of letters of credit (LC) for capital machinery in the data processing industry rose by 145 percent year-on-year during the July-February period of the current fiscal year, according to Bangladesh Bank's special review on the import situation.
During the same period, LC opening for import of capital machinery in the telecom industry surged by 309 percent. Settlement statistics also show that import of machinery for the telecom sector rose by 62 percent.
In September last year the government offered 3G licences to mobile operators. As per a tentative roadmap, the telecom operators were supposed to roll out 3G services throughout the country by March. Grameenphone has already expanded its 3G network across the country, while other operators are still working on expansion.
BB Governor Atiur Rahman told The Daily Star that the mobile operators' need for capital was increasing after they went for 3G licences.
He said the central bank gave a go-ahead to Banglalink for releasing corporate bonds worth $300 million. Grameenphone has also been given permission to take a big amount of foreign credit.
"These have been done considering the gradual expansion of the telecom industry."
Both IT-related activities and software exports are on the rise.
Rahman said, as BASIS (Bangladesh Association of Software and Information Services) has targeted exporting software worth $1 billion per year, investment in the sector is increasing now.
Import of new equipment is needed to introduce mobile banking, he said, adding that a new IT platform will also be required for selling bonds.
The central bank has laid emphasis on automation of the banking sector.

Also, the International Monetary Fund suggested that all banks should complete automation of their branches by 2016.
The BB governor said the software industry will get a boost as banks and corporate houses have targeted massive automation.
Mahmud Hossain, chief corporate affairs officer of Grameenphone, said mobile operators are investing a huge amount of money in developing their 3G network.
Apart from telecom and data processing industries, LC opening for import of capital machinery has increased 100 percent to 318 percent in the leather and tannery, energy and power, and steel and engineering sectors.
However, the growth in LC opening for capital machinery import in the garment and electronic industries has been moderate.
Zahid Hussain, lead economist at the World Bank's Dhaka office, said the overall investment situation is still weak but opportunities have been created in some industries where import of capital machinery is increasing.
The trend has been reflected in the overall import in the first eight months of the current fiscal year. Overall import increased 16.42 percent year-on-year during July-February. However, import had gone down 6 percent during the period last fiscal year, compared to the same period in the previous year.
Meanwhile, the amount of excess liquidity in banks almost halved to Tk 37,368 crore in February compared to June last year due to the rise in import, according to central bank statistics.
However, the capital machinery import situation was dismal for a good number of industries.
Import of capital machinery for the textile industry dropped 18 percent during the period, jute industry around 6 percent, plastic industry 20 percent, packing industry 52 percent, healthcare service and medical industry 30 percent, and shipbuilding and marine industries 49 percent.
According to settlement statistics, import of capital machinery for shipbuilding and marine industries increased 250 percent.