VPN ban, slow internet a grave threat

Industry leaders call for creating balance between national security and growth

ISLAMABAD/KARACHI:

Software houses of Pakistan have warned that internet slowdown and the blocking of virtual private network (VPN) services will certainly translate into an existential threat as it will result in irrecoverable financial costs, service disruptions and reputational loss in the export markets of IT and IT-enabled services (ITeS).

"Even by conservative estimates, the IT industry will suffer losses of tens of millions of dollars in the short term and the reputational and intangible losses will be huge and devastating in the long run, especially in the face of an evolving global competitive landscape," said Sajjad Mustafa Syed, Chairman of the Pakistan Software Houses Association (P@SHA), the apex representative body of the IT industry.

He stressed that it would be a huge blow to one of the fastest growing industries and would also have a domino effect on other sectors of the economy as IT had become an integral part of all industries. It is pertinent to note that IT industry exports reached $3.2 billion in FY24.

Sajjad Mustafa Syed made it clear that domestic and international IT companies would be forced to close or significantly restrict their operations, which would be detrimental to the flourishing industry vis-a-vis exports, skills development and employment generation.

It will be an irreparable setback to the enabling and fruitful initiatives being undertaken with the support of the Ministry of IT and Telecom, Special Investment Facilitation Council and Prime Minister's Office.

Moreover, it will be extremely demoralising and discouraging for the IT companies, their workforce, start-up entrepreneurs, freelancers and everyone involved in the sector, who are working hard to bring Pakistan to the forefront of global tech destinations.

Eminent IT professional and Jaffer Business Systems Chief Executive Veqarul Islam remarked that there was some need to understand that in today's world internet was extremely necessary and unavoidable.

It is really difficult to run the country without a proper and speedy internet service. If a policy is formulated today, it will impact the IT industry in future after one, five or even 10 years.

"You are giving a message to the world that slow internet or no internet does not affect us. Such a message in 2024 seems criminal, just as somebody said in 1901 that they did not need a vehicle," he said.

Any disruption to internet services makes the lives of IT professionals miserable, which means tech companies are being suggested to leave the industry. "Such a ridiculous thinking needs to be addressed," the IT expert added.

Pakistan Freelancers Association President and CEO Tufail Ahmed Khan said the freelancing community with foreign clients and big projects had aired deep concern over the blocking of VPNs by the authorities.

Since the step being taken is a matter of national security, freelancers must cooperate with the authorities and rely on the whitelisting of their IPs for fast and uninterrupted internet services.

"I would recommend the government and relevant authorities to take all stakeholders on board, including the corporate sector, IT companies and representatives of freelancers for drawing up a roadmap to curb all malicious activities on the internet, while safeguarding the IT companies and freelancers through a special internet service or access, which can help continue their day-to-day operations and let them earn their livelihood," he said.

P@SHA chairman clarified that the IT industry stood with the state and the government in its fight against all forms of terrorism – be it physical, psychological, financial or cyber terrorism – due to the misuse of internet.

However, the industry believes, the economic well-being and exports are indispensable to overcome the balance of payments crisis, current account deficit and socio-economic ills, which stem from unemployment, poverty and the lack of skills.

He pointed out that Pakistan's IT and ITeS exports, which were heavily dependent on the use of internet and VPN, had been growing at an average of 30% per year and were on way to touch $15 billion in the next five years, provided the government ensured continuity in export, fiscal, financial, SME, infrastructure and IT policies.

Sajjad Mustafa Syed explained that if VPNs were blocked, most of the IT companies, call centres and business process outsourcing (BPO) organisations would lose all the major Fortune 500 clients as well as others as data protection and cybersecurity were of paramount importance to the clients and connecting to client systems through VPN was a global norm and standard.

He maintained that IT companies and Pakistan's vibrant and young freelancers would need to establish offices and infrastructure overseas, leading to burgeoning operational costs for them. Cautious estimates of the increase in operational costs for VPN blocking could be between $100 million and $150 million each year, he added.