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he high skill, low cost labor resource of the electronics sector in Bangladesh offers companies great returns on investment. Whilst the global market for semiconductors is worth in excess of $200bn and is dominated by the Asian economies, Bangladesh has significant financial and economic factors in its favor that make it the best choice for many companies.

Sector Highlights

  • Manufacturing of semiconductors could be established as a stand alone industry.
  • Bangladesh is going to be one of the largest cell-phone markets in South Asia.
  • The home appliance market in Bangladesh is growing rapidly.
  • The labor-intensive nature of the electronic industry matches the ability of Bangladesh to provide a high skilled labor source.

Industry Background

The electronics industry in Bangladesh mostly produces consumer items. Home appliances includes televisions, radios, DVDs and CD players, refrigerators, air conditioners, ovens, electronic fans, blenders etc. are being assembled to a large extent. To ensure the performance reliability, the key challenges in this sector are technical assistance and proper technology orientation of the industry. Developing the significant capacity and skill in assembly and manufacture of a wide range of electronic components and parts is crucial.

 

As yet, Bangladesh does not have any telecommunication equipment industry in the private sector. However, an urgent need for diversification and modernization is felt among the existing entrepreneurs, government and professionals. The government is keen to provide and ensure enabling assistance to the development of this sector.

Industry Outlook

Bangladesh's experience in basic electronics spans over two decades. In recent years, European and Asian electronic firms have established technical collaboration with their Bangladeshi counterparts to produce some electronic goods at competitive prices. This has tremendous potentiality for expansion.

 

The government of Bangladesh has adopted National Telecommunication Policy, 1998. Investment is encouraged through BLT-BOT/BOO/BTO* and other joint venture schemes which by greatly increasing the capacity, quality and type of services, will create improved efficiencies in other sectors such as transportation energy and the textile industry.

 

To meet the telecommunications' requirements of the country the government has been developing and expanding the systems and services of Bangladesh Telegraph and Telephone Board. Private sector operations in the rural telecommunication, paging, cellular telephones and riverine radio trunking have already been allowed. At present seven private operators are providing their services to about 100,000 customers. Government has allowed expanding 300,000 digital telephone lines in Dhaka by private sector participation through open tendering.

 

In accordance with overall national policy, liberalization of the telecommunications sector will continue. However, the government retains the sale authority to determine the number of competitions that are economically viable for certain services. The strategy is to provide equal and rational opportunities to all competitors.

 

Skilled, easily trainable and low-cost human resources are the main cost advantage of setting up electronic industry in Bangladesh. Growing domestic demand and international market access are some key attractive issues to the investors. In the economies like Malaysia, Singapore, Korea and Thailand, electronics contribute a major portion in the GDP. They are encouraging electronic industry to shift from low-end assembly operations with high import content of inputs to upstream higher value-added activities. In this context, relocation, outward investment and joint venture with Bangladeshi companies could be gainful strategies. To capitalize on the comparative advantages, substantial foreign investment from those countries is highly encouraged.

BLT-BOT/BOO/BTO=BOO refers to Build, Operate & Own. BLT refers to Build, Lease and Transfer while BOT refers to Build, Operate and Transfer.