Digital economy in disarray as nationwide shutdown stalls business sectors
Following widespread student protests, Bangladesh experienced a near-total internet shutdown since July 18. This measure, aimed at quelling unrest over the country’s controversial quota system for government jobs, has severely affected the tech sector.
Bangladesh’s technology sector generates around $1.4 billion annually from clients in about 80 countries and aims to reach $5 billion by 2025.
The country hosts over 4,500 tech companies employing more than 750,000 professionals and boasts a budding startup ecosystem with at least two billion-dollar companies.
Blackout interrupts BPO and retail tech prospects
The internet blackout paralyzed two significant areas of tech: business process outsourcing (BPO) and retail technology, which includes e-commerce and, to a smaller extent, F-commerce.
These sectors are heavily reliant on stable internet to serve international clients. In fact, the disruption has forced many BPO firms to halt operations, leading to significant financial losses and jeopardizing contractual obligations.
Bangladesh’s thriving BPO sector, expected to grow annually by 11.13% and reach $1 billion in revenue by 2029, now faces potential long-term reputational damage. The industry has been losing $7 million daily since the blackout began.
With internet access disrupted, online transactions have also plummeted. Major e-commerce platforms, previously thriving due to increased digital adoption during the COVID-19 pandemic, are now struggling.
In an interview, Fahim Ahmed, CEO of ride-hailing company Pathao, reported that the digital commerce sector—including e-commerce, logistics, and ride-hailing services—is losing $5 million daily. The blackout has affected sales, logistics, and customer service, leading to widespread customer dissatisfaction.
F-commerce businesses face a decline in transactions
F-commerce, involving sales through Facebook and other social media platforms, has dramatically declined since the blackout. Small businesses operating exclusively on these platforms cannot reach customers or process orders.
The sector, crucial to Bangladesh’s digital economy, has seen a total daily transaction loss of approximately $10,220,000 (Tk 120 crore) during the ten-day blackout, totaling around $102,202,925 (Tk 1,200 crore).
Ferdaus Ara Begum, head of the Dhaka-based think tank Business Initiative Leading Development (BUILD), emphasized that the government should prioritize restoring internet access to help life return to normal.
In an interview with Reuters, she said, “This crisis underscores the crucial role the internet plays in our economy and highlights how digital technology impacts every aspect of our daily lives.”
Bangladesh remained disconnected from broadband and mobile internet until July 23, when broadband was gradually restored, with mobile internet following on July 28.
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Zami, M. T. (2024, July 26). Bangladesh’s internet shutdown isolates citizens, disrupts business. Reuters. Retrieved from https://www.reuters.com/world/asia-pacific/bangladeshs-internet-shutdown-isolates-citizens-disrupts-business-2024-07-26/
Tanner, J. (2024, July 24). Bangladesh counts cost of internet blackout as service partially restored. Developing Telecoms. Retrieved from https://developingtelecoms.com/telecom-business/telecom-regulation/17052-bangladesh-counts-cost-of-internet-blackout-as-service-partially-restored.html
