Digital Pakistan — navigating the rough waters

If govt is serious about Digital Pakistan, issue of network coverage & affordability of services needs to be resolved

It’s heartening to see Tania Aidrus leaving her lucrative job at Google and coming back to lead the Digital Pakistan initiative. She has the vision and the spark but more importantly, she also has the mandate from the Prime Minister to bring a change.

Tania has joined at a difficult time for the digital sector, especially the telecom industry. Smart phone penetration is declining; three of the four telecom companies (telcos) are in the court against the government, and the Digitization Transformation Committee chaired by the Prime Minister has not even met once since its formation.

The first and foremost role of the government in promoting Digital Pakistan is to broaden digital access. The access in turn depends on the availability of high-quality broadband network and affordable services and smart phones.

There are 163 million cellular subscribers, out of which only 73 million use the 3G/4G services. With a 3G/4G network coverage of approximately 70%, this means that there are still 41 million potential users who are excluded. And to make them a part of Digital Pakistan, they need to have access to broadband network and smartphones.

Regulatory duties on mobile phone imports and massive devaluation have pushed the smartphone prices beyond the reach of millions. The price of the cheapest smartphone now stands at about Rs15,000 with the government taking away Rs2,700 as taxes. The smartphone penetration has therefore started dropping and the 10 million smartphones imported in 2017 have now reduced to less than 5 million sets in 2019. Revenue considerations often take precedence over other policy goals. But ironically, in this case, the foregone revenue in terms of telco service tax and sales tax exceeds the duties collected.

Then comes the issue of network coverage and affordability of services, which in turn depend on telcos. Rather than incentivising them to enhance their coverage and make their services more affordable, the government has locked horns with them on the issue of spectrum licensing. The government is pushing for a price tag of $450 million per block compared to $291 million in 2004, but cellular companies claim that this means a whopping 2.5 times increase over 15 years, as they earn their revenues in rupees. Even if the government wins the case, the telcos would most likely pass on the cost to the consumers, adversely impacting the affordability of the services.

If the government is serious about Digital Pakistan, this issue needs to be resolved and the best way would be to rationalise the prices, with more ambitious roll-out obligations for telcos to improve their coverage.

Lastly, good intentions and ambitious policy goals without the requisite implementation capability means nothing. To implement the Digital Pakistan initiative, we need concerted efforts by multiple provincial and federal departments and agencies. But if the past is of any evidence, this is where most of the policies fail. We have a great track record of well-drafted policies, cutting-edge regulations and modern laws, but when they pass through the filter of implementation, they somehow translate into poorly executed projects without much impact on ground.

Sitting in the PM’s office may help Tania, but without a solid ministerial portfolio, her job would be even more challenging. However, a good starting point for her could be to aim for a single point of access for all government services, paperless government offices and digitising government payments. If the PTI government can enable her to deliver on the promise of Digital Pakistan, not only would it put the country on the path to prosperity but would also create a positive example for other talented overseas Pakistanis to join hands.

Published in The Express Tribune, December 10^th, 2019.

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