Internet suspension results in Rs820m loss

Industry leaders call upon PM to restore services, say effect on economy is quantifiable

KARACHI:

The suspension of mobile broadband services in Pakistan due to political escalation has caused significant financial losses for digital service providers, the government, and the general population. The suspension has resulted in an estimated revenue loss of Rs820 million for telecom operators, while the government has lost around Rs287 million in tax revenue. Individuals who depend on digital apps and payments, such as Careem, InDrive, FoodPanda etc. have also suffered a significant loss in earnings.

The IT industry, which is already under pressure due to bad governmental policies and a lack of continuity, has come to a standstill since the suspension of the internet.

Chairman of Pakistan Software Houses Association (P@SHA) Muhammad Zohaib Khan lambasted the blanket blockage of internet services in the country, calling it mindless and consultation-less. According to a statement, Khan said, “The internet is our lifeline, our office, our communications infrastructure and IT industry can’t operate without it.”

Shutting down the internet is not a solution to anything; it creates more problems than it solves, tweeted Aamir Ibrahim, CEO of Jazz. “For almost 24 hours, 125 million Pakistanis have been without mobile internet – a critical tool in emergencies and productivity.”

He demanded the immediate resumption of internet services to the IT industry, stating that “the devastating effect on the economy is quantifiable but the inconvenience to people is incalculable.”

It is pertinent to note that most IT professionals are working from home today due to the precarious law and order situation in the country and may have to continue doing so for the next few days in the backdrop of political uncertainty.

The blanket blockage of internet services has had a significantly adverse impact on IT companies. Their ability to carry out day-to-day operations is wholly dependent on internet connectivity, said Nasheed Malik, analyst at Topline Securities. Companies that provide digital services primarily rely on websites and social media platforms to deliver their products and services. With the internet blackout, they are unable to complete their orders, causing delays and loss of revenue. Freelancers who work independently and depend on the internet to perform their jobs are also unable to access their work, communicate with their clients and submit their assignments on time, which has adversely impacted their income and credibility in the market.

Pakistan earned $2 billion in IT exports during 2022, a hard currency source for a country struggling to meet its foreign exchange needs, said Parvez Iftikhar, former CEO of Universal Service Fund Pakistan (USF). When overseas buyers experience disruptions in internet connectivity in Pakistan, they shy away from engaging with IT service companies in the future, said Iftikhar. Such disruptions even cause breaches of running contracts with overseas buyers of IT services.

Local technology startups are playing an increasingly important role in promoting entrepreneurship. Pakistani tech startups attracted more than $300 million in investments in 2022. Internet disruptions impact tech startups badly.

The P@SHA chairman vociferously demanded the immediate resumption of internet services to the IT industry and urged Prime Minister Shehbaz Sharif to intervene directly and advise the Pakistan Telecommunications Authority (PTA) to resume the internet services without wasting any time. He also asked for the support of the Ministry of IT and Telecom (MoITT), Pakistan Software Export Board (PSEB), and Tech Destination Pakistan administrations to ask the PM to issue categorical instructions.

An official from PTA confirmed that mobile broadband services were suspended in the country but refrained from giving a timeline for its restoration.

Published in The Express Tribune, May 11^th, 2023.

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