‘Dismal economy restricting broadband penetration’

"Amid dismal economic expansion, the broadband sector is not growing at its potential pace," Qubee Pakistan CEO Jamal Nasir.

“The number of broadband users in the country has not grown in proportion to population growth over the last few years, mainly because of slow growth in the economy,” Nasir said, while speaking to a select group of reporters at a local hotel here on Thursday.

Linking broadband penetration with high gross domestic product (GDP), he said economic experts often inter-relate high broadband penetration with high economic growth. Pakistan in recent years has experienced slowed economic growth, due to which broadband penetration in the country has dipped, he claimed.

Nasir informed the gathering that the affordability of broadband services has also been a major hurdle in the country. “The affordability of broadband services is also directly related to slow economic growth and high inflation in Pakistan, which has affected the profitability of service providers,” he said.

Talking about the role of big cities, especially Karachi, he pointed out that many peripheral areas of big cities do not enjoy sufficient broadband facilities – a problem that must be tackled by the public administration in order to increase broadband penetration.

“Broadband brings rapid changes in different sectors of the economy. We saw such swift changes in Pakistan too,” he said, while reminiscing about the ‘broadband boom’ Pakistan experienced a few years ago.

Sharing an example of the benefits of broadband penetration to the average Pakistani, Nasir related that a religious scholar near Peshawar teaches the recitation of the Quran to students in different western countries through Skype. “The person starts teaching at six in the morning and ends his sessions by 11am. He not only earns a respectable income, but also receives the payments for his services online.”

According to the latest available statistics from the Pakistan Telecommunication Authority (PTA), there are around 2.0 million broadband users in the country as of February 2012; up from 1.5 million in fiscal 2010-11.

Despite the purported increase in broadband users and hopes of further growth in coming years, industry officials are still not satisfied with broadband penetration in the country. Only one percent of Pakistanis have access to broadband services, even though tough competition among service providers should mean greater expansion.

Recently, the Competition Commission of Pakistan (CCP) – the country’s anti-trust watchdog – initiated an inquiry against the Pakistan Telecommunication Company (PTCL) for abusing its monopoly position in the broadband market for driving out competition. The CCP alleges that ever since PTCL’s entry in the DSL retail market, the number of total service providers has reduced from 11 to six, while no new player has entered the market.

Published in The Express Tribune, June 29^th, 2012.