INSTITUTE OF BUSINESS ADMINISTRATION (IBA) UNIVERSITY OF DHAKA MASTER OF BUSINESS ADMINISTRATION (MBA) DHAKA-1000 (Thesis Proposal) Application for

the approval of Managerial Economics Thesis Date: 16 May 2012

1. Name of the student: Sushanta Paul Roll No. Batch Session 2. Present Address : ZR 82 : MBA 45D : 2010-2011 : IBA Hostel, 140 Green Road, Dhaka-1215

3. Name of the Supervisor: Professor Dr Saiful Majid Professor Institute of Business Administration (IBA) University of Dhaka 4. Name of the Course: Managerial Economics 5. Program: Master of Business Administration (MBA) 6. Date of First Enrolment in the Program: 7 February 2011 7. Tentative Title: Economic Utility analysis of fiber-optic submarine cable in Bangladesh

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8. Introduction
Fiber-optic communication is a method of transmitting information from one place to another by sending light through an optical fiber. The light forms an electromagnetic carrier wave that is modulated to carry information. First developed in the 1970s, fiber-optic communication systems have revolutionized the telecommunications industry and played a major role in the advent of the Information Age. Because of its advantages over electrical transmission, the use of optical fiber has largely replaced copper wire communications in core networks in the developed world. The process of communicating using fiber-optics involves the following basic steps: Creating the optical signal using a transmitter, relaying the signal along the fiber, ensuring that the signal does not become too distorted or weak, and receiving the optical signal and converting it into an electrical signal.

9. Background
Bangladesh Telecommunications Company Limited (BTCL) has been providing with national and international telecommunication services since its inception. Narrow band HF systems were being used for international communications. However, since 1975, BTCL has been using Intelsat Satellites for International Telecommunications for voice and data. International voice service is being provided exclusively by BTCL. Data service is being provided mainly in two different ways: through International Private Leased Circuit (IPLC) and through Leased IP Access to BTCL Internet Node. Telecom transmission media has changed with the passage of time from HF to Satellite to todays Submarine Cable. To facilitate a wide range of bandwidth at affordable price especially for software exporters and for ICT usage, BTCL has become a member of SEAME-WE-4 Consortium to connect Bangladesh to the Information Super Highway.

10. Applications

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Optical fiber is used by many telecommunications companies to transmit telephone signals, Internet communication, and cable television signals. Due to much lower attenuation and interference, optical fiber has large advantages over existing copper wire in long-distance and high-demand applications. However, infrastructure development within cities was relatively difficult and time-consuming, and fiber-optic systems were complex and expensive to install and operate. Due to these difficulties, fiber-optic communication systems have primarily been installed in long-distance applications, where they can be used to their full transmission capacity, offsetting the increased cost. Since the year 2000, the prices for fiber-optic communications have dropped considerably. The price for rolling out fiber to the home has currently become more cost-effective than that of rolling out a copper based network. Prices have dropped to $850 per subscriber in the US and lower in countries like Bangladesh, where digging costs are low. Since 1990, when optical-amplification systems became commercially available, the telecommunications industry has laid a vast network of intercity and transoceanic fiber communication lines. By 2002, an intercontinental network of 250,000 km of submarine communications cable with a capacity of 2.56 Tb/s was completed, and although specific network capacities are privileged information, telecommunications investment reports indicate that network capacity has increased dramatically since 2002.

11. Objectives of This Work

The objectives of investigating the optical fiber networks in Bangladesh are given below: BTCL. Investigating the existing fiber optic submarine cable networks used in BTCL and To study the economic impacts of optical fiber submarine cable network system in

analyzing its capacity, utilization and infrastructure. To study its economic impact and future prospect on ICT sectors of Bangladesh.

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12. Theoretical approach

Three major basic components are required to facilitate and ectablish the fiber-optic communication. Several other technological concepts are indipensable for accomplishing the desired task.

12.1 Basic components

Modern fiber-optic communication systems generally include an optical transmitter to convert an electrical signal into an optical signal to send into the optical fiber, a cable containing bundles of multiple optical fibers that is routed through underground conduits and buildings, multiple kinds of amplifiers, and an optical receiver to recover the signal as an electrical signal. The information transmitted is typically digital information generated by computers, telephone systems, and cable television companies.

12.1.1 Transmitters
The most commonly-used optical transmitters are semiconductor devices such as lightemitting diodes (LEDs) and laser diodes. For use in optical communications, semiconductor optical transmitters must be designed to be compact, efficient, and reliable, while operating in an optimal wavelength range, and directly modulated at high frequencies. LEDs are suitable primarily for local-area-network applications with bit rates of 10-100 Mbit/s and transmission distances of a few kilometers. LEDs have also been developed that use several quantum wells to emit light at different wavelengths over a broad spectrum, and are currently in use for local-area WDM networks. A semiconductor laser emits light through stimulated emission rather than spontaneous emission, which results in high output power (~100 mW) as well as other benefits related to the nature of coherent light. The output of a laser is relatively directional, allowing high coupling efficiency (~50 %) into single-mode fiber. The narrow spectral width also allows

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for high bit rates since it reduces the effect of chromatic dispersion. Furthermore, semiconductor lasers can be modulated directly at high frequencies because of short recombination time.

12.1.2 Fiber
Optical fiber consists of a core, cladding, and a protective outer coating, which guides light along the core by total internal reflection. The core, and the lower-refractive-index cladding, are typically made of high-quality silica glass, though they can both be made of plastic as well. An optical fiber can break if bent too sharply. Due to the microscopic precision required to align the fiber cores, connecting two optical fibers, whether done by fusion splicing or mechanical splicing, requires special skills and interconnection technology. Two main categories of optical fiber used in fiber optic communications are multi-mode optical fiber and single-mode optical fiber. Multimode fiber has a larger core ( 50 micrometres), allowing less precise, cheaper transmitters and receivers to connect to it as well as cheaper connectors. However, multi-mode fiber introduces multimode distortion which often limits the bandwidth and length of the link. Furthermore, because of its higher dopant content, multimode fiber is usually more expensive and exhibits higher attenuation. Single-mode fibers smaller core (<10 micrometres) necessitates more expensive components and interconnection methods, but allows much longer, higher-performance links. In order to package fiber into a commercially-viable product, it is protectively-coated, typically by using ultraviolet (UV) light-cured acrylate polymers, terminated with optical fiber connectors, and assembled into a cable. It can then be laid in the ground, run through a building or deployed aerially in a manner similar to copper cable. Once deployed, such cables require substantially less maintenance than copper cable.

12.1.3 Amplifiers
The transmission distance of a fiber-optic communication system has traditionally been limited primarily by fiber attenuation and second by fiber distortion. The solution to this has

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been to use opto-electronic repeaters. These repeaters first convert the signal to an electrical signal then use a transmitter to send the signal again at a higher intensity. Because of their high complexity, especially with modern wavelength-division multiplexed signals, and the fact that they had to be installed about once every 20 km, the cost for these repeaters was very high. An alternative approach is to use an optical amplifier, which amplifies the optical signal directly without having to convert the signal into the electrical domain. Made by doping a length of fiber with the rare-earth mineral erbium, and pumping it with light from a laser with a shorter wavelength than the communications signal (typically 980 nm), amplifiers have largely replaced repeaters in new installations.

12.1.4 Receivers
The main component of an optical receiver is a photodetector that converts light into electricity through the photoelectric effect. The photodetector is typically a semiconductorbased photodiode, such as a p-n photodiode, a p-i-n photodiode, or an avalanche photodiode. Metal-semiconductor-metal (MSM) photodetectors are also used due to their suitability for circuit integration in regenerators and wavelength-division multiplexers. The optical-electrical converters is typically coupled with a transimpedance amplifier and limiting amplifier to produce a digital signal in the electrical domain from the incoming optical signal, which may be attenuated and distorted by passing through the channel. Further signal processing such as clock recovery from data (CDR) by a phase-locked loop may also be applied before the data is passed on.

12.2 Technology

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So far as the technological approach is concerned knowledge on WDM, BDP, Dispersion, Attenuation, Transmission windows, Regeneration and Last mile is inevitable for fiber-optic communication approach.

12.2.1 Wavelength-division multiplexing (WDM)

Wavelength-division multiplexing (WDM) is the practice of dividing the wavelength capacity of an optical fiber into multiple channels in order to send more than one signal over the same fiber. This requires a wavelength division multiplexer in the transmitting equipment and a wavelength division demultiplexer (essentially a spectrometer) in the receiving equipment. Arrayed waveguide gratings are commonly used for multiplexing and demultiplexing in WDM. Using WDM technology now commercially available, the bandwidth of a fiber can be divided into as many as 80 channels to support a combined bit rate into the range of terabits per second.

12.2.2 Bandwidth-distance product

Because the effect of dispersion increases with the length of the fiber, a fiber transmission system is often characterized by its bandwidth-distance product, often expressed in units of MHzkm. This value is a product of bandwidth and distance because there is a trade off between the bandwidth of the signal and the distance it can be carried. For example, a common multimode fiber with bandwidth-distance product of 500 MHzkm could carry a 500 MHz signal for 1 km or a 1000 MHz signal for 0.5 km.

12.2.3 Dispersion
For modern glass optical fiber, the maximum transmission distance is limited not by attenuation but by dispersion, or spreading of optical pulses as they travel along the fiber. Dispersion in optical fibers is caused by a variety of factors. Intermodal dispersion, caused by the different axial speeds of different transverse modes, limits the performance of multimode fiber. Because single-mode fiber supports only one transverse mode, intermodal dispersion is eliminated.

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12.2.4 Attenuation
Fiber attenuation, which necessitates the use of amplification systems, is caused by a combination of material absorption, Rayleigh scattering, Mie scattering, and connection losses. Although material absorption for pure silica is only around 0.03 dB/km (modern fiber has attenuation around 0.3 dB/km), impurities in the original optical fibers caused attenuation of about 1000 dB/km. Other forms of attenuation are caused by physical stresses to the fiber, microscopic fluctuations in density, and imperfect splicing techniques.

12.2.5 Transmission windows

Each of the effects that contributes to attenuation and dispersion depends on the optical wavelength, however wavelength bands exist where these effects are weakest, making these bands, or windows, most favorable for transmission. These windows have been standardized, and the current bands defined are the following: Band O band E band S band C band L band U band Description original extended short wavelengths conventional ("erbium window") long wavelengths ultralong wavelengths Wavelength Range 1260 to 1360 nm 1360 to 1460 nm 1460 to 1530 nm 1530 to 1565 nm 1565 to 1625 nm 1625 to 1675 nm

12.2.6 Regeneration
When a communications link must span a larger distance than existing fiber-optic technology is capable of, the signal must be regenerated at intermediate points in the link by repeaters. Repeaters add substantial cost to a communication system, and so system designers attempt to minimize their use.

12.2.7 Last mile

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Although fiber-optic systems excel in high-bandwidth applications, optical fiber has been slow to achieve its goal of fiber to the premises or to solve the last mile problem. However, as bandwidth demand increases, more and more progress towards this goal can be observed. In Japan, for instance, fiber-optic systems are beginning to replace wire-based DSL as a broadband Internet source. South Koreas KT also provides a service called FTTH (Fiber To The Home), which provides 100 percent fiber-optic connections to the subscribers home. Verizon, a US based telecom company, provides a service called FIOS which offers TV, high-speed internet, and telephone communications on a 100 percent fiber-optic network to a junction box mounted in a subscribers home.

13. Comparison with electrical transmission

The choice between optical fiber and electrical (or copper) transmission for a particular system is made based on a number of trade-offs. Optical fiber is generally chosen for systems requiring higher bandwidth or spanning longer distances than electrical cabling can accommodate. The main benefits of fiber are its exceptionally low loss, allowing long distances between amplifiers or repeaters; and its inherently high data-carrying capacity, such that thousands of electrical links would be required to replace a single high bandwidth fiber. Another benefit of fiber is that even when run alongside each other for long distances, fiber cables experience effectively no crosstalk, in contrast to some types of electrical transmission lines. In short distance and relatively low bandwidth applications, electrical transmission is often preferred because of its

Lower material cost, where large quantities are not required. Lower cost of transmitters and receivers. Ease of splicing. Capability to carry electrical power as well as signals. Ease of operating transducers in linear mode.

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Because of these benefits of electrical transmission, optical communication is not common in short box-to-box, backplane, or chip-to-chip applications; however, optical systems on those scales have been demonstrated in the laboratory. In certain situations fiber may be used even for short distance or low bandwidth applications, due to other important features:

Immunity to electromagnetic interference, including nuclear electromagnetic pulses (although fiber can be damaged by alpha and beta radiation). High electrical resistance, making it safe to use near high-voltage equipment or between areas with different earth potentials. Lighter weight, important, for example, in aircraft. No sparks, important in flammable or explosive gas environments. Not electromagnetically radiating, and difficult to tap without disrupting the signal, important in high-security environments. Much smaller cable size important where pathway is limited, such as networking an existing building, where smaller channels can be drilled.

14. Relevant fields concerned on this thesis: 14.1 SEA-ME-WE-4 Submarine Cable:
ICT Policy 2002 demands BTCL to set up submarine cable connectivity to meet the ever increasing demand for broadband services and to meet requirement for growing use of telephones, internet etc.. BTCL took the opportunity of joining the SEA-ME-WE-4 consortium and a project to that end has been undertaken. As a signatory to the consortium BTCL is entrusted with all the tasks related to the submarine cable in the national and international level. It is hoped that, with the advent of SEA-ME-WE-4, use of bandwidth will increase sharply for international telecommunication because of the cheaper bandwidth cost. Submarine cable connectivity in Bangladesh will dramatically improve the volume and quality of data and voice communication, meet the increasing demand of international bandwidth. The delay factor in satellite communication which is a barrier for high speed data transfer will be eliminated. ICT usage and activities will be promoted.

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Available capacity for BTCL in this cable is 468,000 MIU* Km which may have a maximum of 64 STM-1 (10 Gbps) at the landing station. MIU is Minimum investment Unit which is equivalent to one STM-1. Out of BTCLs total capacity, 50,000 MIU* Km has already been contributed to the common pool of the consortium for sale. Sales and marketing of this bandwidth will be performed by the consortium in first two years time. The capacity of the cable will be enhanced further in different phases with minimal investment from BTCL. Minimum capacity unit for this cable is STM-1 i.e. BTCL has to utilize the capacity at STM-1 or multiple of that between any two landing stations.

14.2 Utilization plan:

The main task of BTCL is to plan well so as to utilize the huge bandwidth available in the cable in a pragmatic and systematic way. BTCL held meetings and discussion with ISPs, BASIS, PSTN and Mobile phone operators and other users to ascertain their present and future requirement and to share ideas on utilization of the submarine cable. After fulfilling the requirement of the country, excess capacity in the main stream may be leased out to overseas operators. For the next two years, capacity can only be sold on lease basis and not as IRU. To make better and greater utilization of the submarine cable new services like IP VPN, Virtual telephone network abroad and various kinds of broadband service may be introduced in the country. Connectivity with different countries may be established through SMW-3 by exchanging equivalent SMW-4 capacity. This Utilization Plan for the cable capacity has been prepared to address the following terms of references: i. ii. iii. iv. v. vi. To determine requirement for voice, data, video, entertainment and similar other broadband services by BTCL and other service providers for next 10 years. To facilitate overall ICT activity to enhance the socio-economic growth of the country. To meet requirements specified by ICT Task Force and BTRC regarding VoIP. Follow the consortium guideline for marketing. Determine surplus cable capacity. Make effective use of the surplus capacity.

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vii.

Domestic backhaul and overseas connectivity.

14.3 Utilizing bandwidth for DATA and INTERNET:

Demands for international bandwidth have a wide range of variation in terms of capacity, protocols, purpose, use, national policy etc. Taking considerations of these aspects, the customer base needs to be segmented and a number of products have to be developed to meet specific requirements of the customers. Proper attention should be given to take into account the indirect economic benefits as well as lost opportunities while pricing these products.

14.4 IPLC:
IPLC is a dedicated secure digital point to point private connection between two locations (usually two LANs) in two different countries that allows transmission of data, large internet packets, real-time video applications like video conferencing and such other information communication service. BTCL has been providing IPLC service through satellite since long and has policy guidelines and tariffs. BTCL offers IPLCs with bandwidth ranging from 64 Kbps to 2Mbps. These IPLCs are usually provided on halfcircuit basis and are established through INTELSAT satellites. Through submarine cable, bandwidth allocation for IPLCs will depend on the requirement and justification which may be from 64 Kbps to 2 Mbps. Higher bandwidth up to 45 Mbps will be allocated after scrutiny by BTCL. IPLCs may be provided on half-circuit as well as on full-circuit basis.

Submarine cable has created a great opportunity for expanding IPLC use. The objectives for the strategy will be as follows: i. ii. Lower Tariff. Easy delivery of service and One-Stop Shopping arrangement (OSS).

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iii. iv. v. vi. vii.

Enhanced support service. Encourage migration from VSAT to submarine cable through incentives. Encourage long term use Encourage bulk use. Encourage IT Enabled Services.

14.5 Access and Co-location:

At present all cities and towns are covered by digital exchanges. All Upazilla exchanges will have digital exchanges by the end of this year. So all telephone subscribers up to Upazilla level will have voice and Internet connectivity through the submarine cable. Rural growth centers will be brought under digital exchanges by installing suitable access network to extend benefits of submarine cable in to the rural areas. Connectivity to private mobile and land phone operators is being further improved to allow access for all the existing subscribers and ensure access for the future growth. Establishment of two more international gateway exchanges is under process BTCLs present data access network is based on the existing DDN which can support only up to 2 Mbps capacity. IP Access network has to be developed where optical interfaces will be deployed in major cities to connect customers through optical local loop at higher speed. At present, DDN nodes are available at 41 districts only. To ensure a homogeneous growth of ICT in the country, Data network will be extended up to all 64 district HQs in the next financial year. Private operators in the country will be allowed to develop access network for data communication only Co-location facility at Dhaka, Chittagong and other big cities will be allowed for the purpose. Collocation facility in BTCL premises at Dhaka and Chittagong will be allowed for customers who require higher capacity like E3/DS3 or STM-1 or higher.

14.6 Policy and Pricing:

Pricing has been done carefully considering the following issues:

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a) Facilitate development of IT enabled services specially Call centers and Business Process Outsourcing (BPO). b) Make IP bandwidth cost-effective and at the same time make ready BTCL IP node and develop it as the most reliable and most attractive choice to the ISPs so that they do not prefer connecting to IP nodes abroad through IPLC. c) Price for greater bandwidth has been made comparatively cheaper so that retail business shifts to other service providers. d) Termination charges, collection charges etc. to be kept low to increase greater utilization of the cable bandwidth and to facilitate penetration of broadband connections in order to meet the target set forth in the coming broadband policy.

14.7 Promotion
Some promotional measures will be taken so that VSAT users are greatly encouraged to give up their VSATs and customers are encouraged for long term commitment.

14.8 Redundancy and Restoration

For the purpose of redundancy and restoration of the international segment satellite earth station will continue functioning. Initially One STM-1 Internet connectivity is being established through west and another through east for redundancy in the main cable. For redundancy in the branch cable, a significant Internet bandwidth are being kept as backup through satellite to meet emergency Internet traffic in case of any fault or failure in the branch cable. To ensure domestic redundancy, both Dhaka-Chittagong and Coxs Bazar Chittagong microwave links are planned to be upgraded to 7+1 STM-1 SDH system. Initiative is going on for hiring dark fibre from PGCB between Dhaka-Chittagong in the first phase.

15. Resource required for completing this work

For completion of this work, the following resource is required.

Recommendation and help from my university to visit the said sectors and collect information on the relevant fields.

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16. References
1) J.M.Senior, Optical Fiber Communication, Prentice Hall, England Cliffs, NJ, 2nd ed., 1992 2) Web:http://csd.ssvl.kth.se/~csd2005-team7/Team%207 03-2005.doc, 27th July, 2007 3) Wayne Tomasi, Electronic Communication System, Prentice Hall, 5th edition, 2004 4) Web: http://www.btcl.net at 25th November, 2007 5) Web: http://www.btcl.org at 25th November, 2007 6) Power Point Presentation of btcl, 9th February 2006. 7) Web: http/www.fiber optics info.com. 3rd January 2007 8) Web: http://www.betelco.com/bd/bdstel/dstar.pdf., 25th November, 2007 9) Encyclopedia of Laser Physics and Technology 10) Fiber-Optic Technologies by Vivek Alwayn 11) The Daily Star Web Edition Vol. 5 Num 1117 12) The Daily Star Web Edition Vol. 5 Num 543 13) www.newagebd.com/2006/may/12/may12/xtra_inner2.html 14) Submarine Cable Utilization Plan from www.btcl.gov.bd/home/main/SubmarineCable.htm Design%20Specifications-15-

17. Cost Estimation

a) Binding, CD writing Binding CD writing Tk. 150 Tk 100 Tk. 250 b) Cost of materials Paper Pen drive Ink Cartridge Tk. 1000 Tk. 1100 Tk. 800

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Tk. 2900

c) Miscellaneous

Tk 4000

Total: Tk. 6700

Signature of the Student & Date

Signature of the Supervisor & Date

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