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Outsource magazine: thought-leadership and outsourcing strategy | August 18, 2017

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Bangladesh

Bangladesh
Outsource Magazine

The Bangladeshi government aims to position the country as the next big thing in international BPO – with particular emphasis on the call centre space. Outsource went to find out more…

The emergence of new sourcing locations has been one of the highest-impact trends of the last few years, as governments the world over look at the huge economic benefits derived by India as a result of its prominent role in the globalisation of IT-enabled service delivery. For one of the newest kids on the sourcing block, though, the lessons learned from India’s success have a deeper resonance: after all, it’s only a few decades ago that Bangladesh and India were two parts of the same country…

With a population of some 162 million crammed into a territory smaller than Iowa or Nepal, Bangladesh is one of the most densely populated countries on earth – and, historically, one of the lowest-earning, with a per-capita GDP (PPP) of approximately $1,600 per annum. It is partly with this combination of huge human assets and vast potential in mind that the Bangladeshi authorities have embarked on a programme of technological and infrastructural development which aims to secure the country a place at the sourcing table, utilising and nurturing a massive potential talent pool in the same way that its neighbour India set out to do a generation ago – but offering, the government believes, quality labour at an even more competitive cost.

“In my opinion, the most important asset Bangladesh possesses for the success of its BPO industry is its hard-working population,” says Rajiuddin Ahmed Raju, the Bangladeshi Minister of Posts & Telecommunications.

“It is interesting that some of the negative indicators about Bangladesh actually turn out to be opportunities when it comes to outsourcing services. For instance: the country is very small and over-populated. This negative reality translates into a large number of call centre agents at a competitive price. As employment opportunities are limited for the educated youth, call centres have the luxury of attracting more qualified agents. Bangladeshis are generally known to be very friendly, dedicated and submissive in nature. Worldwide, Bangladeshi workers are famous for their dedicated work. For outsourcing services, the supply is very large indeed. There are millions of dedicated agents, waiting eagerly to serve the most demanding organisations of the world through remote connectivity.”

The advantages to Bangladesh of grabbing some of the global sourcing pie are obvious. In particular, the authorities have seen the call centre space as providing an excellent entry-point for Bangladesh into the global market, capitalising upon the country’s historic cultural and linguistic connections with the English-speaking world. However, the government is aware that a good deal of education, and incentivisation, is required to bring the country into the headlights of organisations looking for a suitable low-cost sourcing destination – education not just amongst Bangladeshis looking for work, but among organisations with work to place.

“Call centres have emerged as a new foreign-currency-earning sector, generating plenty of job opportunities,” enthuses Raju. “This sector has every potential to flourish, bagging high-end contracts from global markets. For this reason, the government has given priority to this sector, providing a number of noteworthy incentives to anyone willing to invest in the offshoring industry of Bangladesh. Recently, BTRC [the Bangladesh Telecommunications Regulatory Commission] is in the process of formulating competitive tariffs and supportive facilities. The commerce ministry has also assured all entrepreneurs willing to invest in call centres of full support from the government – which has also offered full facilities like duty free imports of capital goods and has provided tax exemption on the import. This support from the Bangladesh government has gone a long way in making Bangladesh a better choice for global outsourcers.”

The aforementioned BTRC is playing a formative role in Bangladesh’s development strategy. The commission’s chairman, Major-General Zia Ahmed, believes his organisation has a responsibility to bring new technologies and facilities to the wider population in a manner that will revolutionise the Bangladeshi economy; furthermore in an advisory and operational capacity the BTRC is both formulating guidelines for the sector and implementing the kind of incentives which Ahmed hopes will initiate a snowballing of the sourcing industry in his country. His ambitions are high.

“The role and vision of the BTRC is to facilitate affordable telecommunication services of acceptable quality for all, regardless of their location,” he says. “As part of this role, the BTRC is working heart and soul for the development of the new and promising BPO sector . The BTRC’s intention and goal regarding the BPO industry is that it would become the largest revenue earning sector of Bangladesh.”

He adds: “For this goal to be successful, the BTRC is helping the government in formulating friendly and favourable policies – as well as implementation and application of such policies. We have ensured duty-free imports of capital goods… According to the call centre guidelines formulated by the BTRC, entrepreneurs are enjoying tax holidays for a maximum of five years.

BTRC officials pay frequent visits to the operational call centres to ensure quality of service. BTRC has also made sure that the BPO entrepreneurs get bank loans and receive remittance without any hassle.” The scale of the challenge facing the BTRC in terms of facilitating “affordable telecommunication services of acceptable quality for all, regardless of their location” is a huge one (the rural nature of Bangladeshi society and ongoing difficulties maintaining uninterrupted electrical supplies to outlying regions mean that only a fraction of the population – some 0.4%, according to research site InternetWorldStats.com (although other statistics vary significantly) – has regular access to the internet.

However, in terms of the task more germane to this publication – that of facilitating the development of a call centre and BPO industry – great strides have already been taken. Although still a very nascent sector in Bangladesh, the work done by the BTRC – in particular the partial relaxation of restrictions on VOIP, which had been considered by some to be a threat to the country’s incumbent telecoms providers – has already borne fruit in the form of over 60 call centres providing outsourced services to international clients. The scale of the existing centres is not huge compared with some units over the border in India; with an average of around 30 seats per site there’s clearly a great deal of scope for expansion even within existing players in the market. Furthermore those sites that already exist are overwhelmingly concentrated in and around Dhaka, the capital, with a secondary tier coming into visibility in Chittagong in the country’s south-east. But the government has been explicit that it sees the industry as it currently stands as the very thin end of a very thick wedge: hence the resources devoted to the BTRC and other bodies charged with promoting the sector both at home and abroad.

“The future of the call centre industry has recently been a subject of discussion in Parliament: this surely speaks of the priority we set for promoting this industry,” says Hasanul Haque Inu, the Chairman of the Parliamentary Standing Committee for the Ministry of Post & Telecommunications. “The aim is to introduce Bangladesh as the next destination for the outsourcers of the western world… For international-level activity, representatives of the government of Bangladesh along with the call centre industry are participating in different international expos (such as Call Centre Expo at Birmingham and Dubai) regularly for the promotion of this industry. The foreign Embassies and High Commissions are also working at their respective places for the promotion of the BPO industry.”

This promotional activity is of course useless without true service-delivery capability on the ground – hence the investment under the aegis of the BTRC and local administrations in infrastructure and training – and the ability to differentiate in an increasingly crowded market. But one particularly sharp arrow in Bangladesh’s quiver goes right to the heart of the industry’s biggest driver: cost. Bangladeshi operatives can compete on a cost level well below that of many of their competitors. Ahmadul Hoq, CEO of provider Virgo, puts the average cost of an entry-level agent at around $1 per hour, with even a senior local manager available for approximately $800 per month. Meanwhile VOIP communication between Dhaka and the US or UK costs around $0.015 and $0.02 per minute, with rent costing between $0.50 and $1 per square foot per month.

One of the BTRC’s main concerns now is to ensure that such a low cost-base isn’t rendered inconsequential by low service quality. In terms of the availability of talent this is not currently an issue since more skilled language-capable graduates are entering the market than there are vacancies available. But with the industry expanding at an increasing rate there is a need to guarantee capable employees for those companies moving into the space. The BTRC’s Ahmed concedes that at present there is “inadequate consciousness amongst students about the prospect of a career as a call centre agent.” However, he says, “the government along with BTRC are taking various steps to grow awareness and consciousness about the BPO industry… Seminars, workshops and leaflet distribution are being organised by industry owners in various private and public universities.”

Crucially, he adds, the “inclusion of basic knowledge on BPO is being incorporated in the university educational curriculum.” Establishing call-centre work as a possible career among the emerging generation may take some hard graft. For one thing, such work – especially for women – is not necessarily seen in the most favourable light among the country’s more affluent and influential families. But the high visibility of the impact such professional opportunities have had in India means that among a certain section of upwardly mobile Bangladeshis the sector is being seen as a potential route to riches – or at least financial independence of a sort previously inaccessible to many. Attracting skilled talent is critical to the success of the project; demonstrating the potential cash benefits of call-centre employment is nothing if not good marketing, as the BRTC is well aware.

Securing Bangladesh a place on the global outsourcing stage will not take place overnight. But the government is prepared to think long-term. During the country’s general election of 2008, Sheikh Hasina Wazed vowed, as part of her successful election manifesto, to introduce by 2021 a ‘Digital Bangladesh’ uniting the country and its population through high-speed telecommunications and bringing new IT-enabled industries to the country. Significant infrastructural and social obstacles to that ambition remain; however the development of a viable and wide-scale BPO and call centre industry remains at the heart of the government’s intentions. Once again ever-aware of the example set by India, it sees ITES as a way to bring Bangladesh out of the economic and social doldrums which have dogged it throughout its history.

“Readymade garments are now the major foreign exchange earning sector with minimum wages for its uneducated and half-educated operators,” laments Ahmed of the BTRC. “On the contrary, BPO agents are well educated and well paid employees, fetching good money for the industry as well as for the country in terms of foreign currency. With proper patronage, this industry will earn maximum foreign currency for the country in due course.”

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