Cellphone operators, banks and multinational companies imported software worth Tk 25 billion (Tk 2500 crore) in the last three years, putting further pressure on balance of payment, while undermining local firms' capacity.

Local software exporters smell a rat behind the rising growth of software imports by multinationals and banks, but the customs authority has linked the rise to lower taxes.

In an internal assessment last month, Dhaka Customs House found that the country's biggest mobile telephony firm Grameenphone alone purchased overseas software of Tk 6.51 billion (Tk 651.85 crore) during the period. The imports by five other mobile phone operators amounted to Tk 5.34 billion.

Other than mobile companies, both government and private commercial and specialized banks imported software worth Tk 4.64 billion (Tk 464 crore).

Dhaka Customs House last week wrote a letter to Bangladesh Bank requesting to look into the rising growth of software import trends. It said the low import duty-- 6.71 per cent may be one of the reasons the multinationals are importing software instead of locally manufactured ones.

Leading ICT personality Mostafa Jabbar told the FE that importing foreign software by passing capable local companies is a crime. "We have been discussing with the government since long to impose higher duty on imported software but the government did not respond to our demand.

Jabbar said the multinational companies might have other reasons including transfer of profit in the name of software import. He suggested for an investigation into the massive import.

Mostafa Jabbar said bank directors sometimes influence bank management to import software so that they can earn additional money from foreign companies behind the scene.

Habibullah N Karim, a software exporter and ICT expert said the local companies can produce all types of software other than some switching software for mobile companies.

"There is no rationale to import such huge amount of software. The cost will be ten times less if those are manufactured locally," Habibullah N Karim said.

Echoing with Jabbar he said the companies might have other motive behind the practice.

He expressed dissatisfaction over import of banking software by government banks. He said Sonali Bank, Bangladesh Commerce Bank and Rajshahi Krishi Unnayan Bank (RAKUB) formed a consortium and appointed Indian company Polarish to install automation system.

"It is absolutely a bull sheet that the government banks are recruiting Indian firms for automation when local companies can do it by ensuring the same quality and security," Habibullah N Karim added.

He said Janata Bank and Agrani Bank also asked Indian companies to install their core banking software.

He suggested an increased rate of duty on software like -ERP, application, core banking and billing software.

Eexpressing his utter dissatisfaction Jabbar said through import of software by government and private banks directors get benefit from foreign companies.

Bangladesh Association of Software and Information Services (BASIS) President Mahbub Jaman said local companies cannot develop some of the switching software for mobile companies but about 70 per cent of other software can be produced locally.

He said the government should introduce some rules and regulations so that banks and mobile companies give priority to local companies in installing software.

Meanwhile, software exports from Bangladesh have nearly doubled in the first five months of the current fiscal year, compared to the same period of the last fiscal.

The country exported information technology and IT enabled services (ITES) worth $29.05 million in July-November, up from $14.82 million in the same period a year ago, according to data from Bangladesh Association of Software and Information Services (BASIS).

Bangladesh exported software worth $45.31 million in fiscal 2010-11.

BASIS has 503 members who develop software in the country, said Tamzid Siddiq Spondon, joint secretary general of BASIS. There are some other companies as well, he said.

According to the Software and IT Service Catalogue 2011 by BASIS, there are over 800 registered software and ITES companies in Bangladesh.

In addition, there are a few hundred unregistered small and home-based software and IT ventures that are carrying out business for both local and international markets, according to the catalogue.

The total size of the industry is estimated to be around $250 million and it employs over 30,000 people.

Financial Express/Bangladesh/ 9th April 2012