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Last Updated: Wednesday, 11 April 2007, 06:15 GMT 07:15 UK
Bangladesh stuck in telecoms jam
By John Sudworth
BBC News, Dhaka

Man in Dhaka phones relatives abroad
Many depend on mobile phones to talk with relatives abroad
Hidden away beneath the bustle of Dhaka's streets, for the past few years an illegal but highly lucrative business has been growing in size.

A network of privately owned computer systems has been busy carrying thousands of international telephone calls into Bangladesh over the internet.

Voice Over Internet Protocol, or VOIP, is a technology in use across the world, and in most places, perfectly legal.

It allows telecoms companies, often those selling pre-paid international phone cards, to route large volumes of calls very cheaply anywhere in the world, by buying space on broadband computer links and computer servers.

But now the illegal system has hit a major problem.

"It used to cost one or two pence a minute to call home," says Hossein, a worker in a Bangladeshi restaurant in London.

"Now we call but we cannot get through, we try again and again, but we just can't get through."

Corruption charges

VOIP has remained illegal in Bangladesh in an attempt by the government to protect the state-owned telephone company, the Bangladesh Telegraph and Telephone Board.

People are facing big problems getting connected in Bangladesh. It is creating a kind of traffic jam - all the time it is busy, busy, busy
VOIP entrepreneur, Hassan
But it simply hasn't worked. Earlier this year it was estimated that VOIP calls accounted for up to 80% of the total telephone traffic from abroad.

There have been rumours that some high profile politicians and businessmen have themselves been operating VOIP internet exchanges.

They have had an interest in keeping the industry outside of the law, it has been argued, as the longer it remained unregulated the longer they did not have to pay tax on the huge revenues it generated.

For whatever reason little action was taken against the VOIP providers and their existence seemed likely to continue to be tolerated.

But then Bangladesh found itself under a state of emergency.

For the past three months the country's new military-backed government has been waging war on what it sees as the too-long tolerated illegality and corruption of the past.

Wealthy and powerful politicians have been arrested and are facing corruption charges.

'Busy, busy, busy'

Thousands of illegally built shops, businesses and slums have been torn down. The VOIP industry has gone the same way.

"They have already taken my equipment from one of my places. This is huge equipment, 11 gateways and 22 modems, many pieces of equipment, maybe $60,000 worth," Hassan says.

Telephone vendors in Dhaka
Small telephone vendors used the cheap VOIP providers' rates
He is one of the young entrepreneurs who made a very good living running the illegal internet phone services, selling space on his computer equipment to foreign phone companies.

But he says closing him down, and others like him, has thrown the system into chaos, as hundreds of thousands of people try to call home with fewer and fewer lines available.

"People are facing big problems getting connected in Bangladesh," he says. "Most are not getting connected. It is creating a kind of traffic jam - all the time it is busy, busy, busy."

Lt Col Zia Safdar is the man who has been leading the drive against the illegal telephone businesses.

He says prior to the raids the size of the industry was enormous.

"At one stage we were a little surprised," he says. "We knew that they were handling a large volume of calls, but we found it was a huge quantity."

As all of it was generating money untouched and untaxed by the government they had no choice but to act, he adds, telling me that the government is now trying to rectify the problem.

It is very important that telecommunication should function well and this needs to be corrected as soon as possible
Anwar-ul Alam Chowdhury

The number of conventional phone circuits is being doubled to at least 30,000 by the end of April, but Col Zia admits that for a country of 140 million people this will still be too few.

Anwar-ul Alam Chowdhury is president of the Bangladesh Garment Manufacturers Association.

He says there are ways round the problem, using e-mail for example, but a functioning international phone network needs to be re-established in the long run.

"Calling from outside Bangladesh is really tough," he says. "It is very important that we have to trade and we have to communicate.

"It is very important that telecommunication should function well and this needs to be corrected as soon as possible."

There is widespread popular support for the emergency government here. People have welcomed the anti-corruption measures and the arrest of high profile individuals on corruption charges.

But there is also concern that some of its actions are hurting those it is meant to be helping. Giving the many overseas workers the chance to once again phone home would be welcomed too.

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