Intel stresses critical need for broadband growth to revive economy

Published: December 16, 2012

Among the lowest: 2.1m was the number of broadband subscribers by August out of a population of 180m.

KARACHI: 

“Affordable computing and broadband is the key to reviving Pakistan’s economy, it is critical that citizens have uncompromised access to computing and connectivity,” said Naveed Siraj, Country Manager of Intel Pakistan Corporation, in an exclusive interview with The Express Tribune.

During the chat, the Intel Pakistan’s chief expressed his views on the impact of a slow broadband and personal computer (PC) penetration on the economy and discussed issues facing Pakistan’s Information Communications Technology (ICT) sector.

With 16% general sales tax (GST), according to Siraj, Pakistan joins the list of countries that have the highest tax on technology purchase – one of the main impediments to PC growth.

“We have one of the lowest PC and broadband penetration rates in the world,” he said. “The use of IT products is less than 5% of the population – the lowest in the region.”

Though overall teledensity stood at 71.8%, there were only 2.1 million broadband subscribers by August this year in Pakistan – the world’s sixth most populous country with around 180 million people.

The technology giant itself experienced a slow growth in its PC sales, which remained limited to small and medium-sized businesses and the corporate sector, during last three to four years, despite recording a three-fold increase in laptop sales during the same period.

Siraj pointed out that affordability of computers in lower-income and even middle-income families is low.

Despite IT investments in the government and enterprise segments during the last decade, he said, a majority of consumers remained deprived of affordable computers and internet access. In terms of purchasing a computer and broadband connection, Pakistanis – as percentage of their disposable income – have the highest ownership cost or lowest affordability level in the region, he said.

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High GST and broadband rates are not the only hurdles in the way of growth of the ICT industry, there are a host of regulatory and policy issues that need to be addressed.

“Pakistan is a dumping ground for global IT waste. High influx of IT scrap has converted our retail IT markets into a scrap market,” Siraj said. “We have a huge grey market. If laws are put in place to regulate this market, manufacturers will focus on it.”

The world is shifting to 4G, but Pakistan is struggling with 3G auction, he said. “One shouldn’t be surprised over why Pakistan is dropping low in international ICT rankings.”

The International Telecommunication Union (ITU) has ranked Pakistan at an abysmal 127th position among 155 countries in its global ICT Development Index report released in October – a slide of two points from last year.

Intel has been trying to highlight these issues and share them with government officials and others keen to see the country grow, Siraj said. “For Pakistan to compete and succeed globally, the government must set clear ICT goals in a coherent national IT and broadband policy,” he proposed.

Explaining, he said, technology helped communities around the world to break from cycles of poverty, it helped improve literacy and standards of education and enhanced capability of healthcare workers to efficiently deliver primary care. Affordable broadband is connecting communities and allowing citizens to participate in the democratic discourse.

He suggested that Islamabad must commit to increasing PC and broadband penetration three times by 2015. Reducing GST will not only increase affordability of IT products but as computing usage increases, it will help the government collect higher revenue as more citizens get connected with services delivered by the government.

Cellular mobile companies should invest in broadband while broadband service providers should explore new products to make broadband more affordable.

Published in The Express Tribune, December 16th, 2012.

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