Pakistan’s IT Sector Suffers $1 Million Hourly Loss Due to Internet Disruptions

Pakistan’s IT sector is facing significant financial loss due to frequent internet outages and disruptions. The Pakistan Software Houses Association (P@SHA) Chairman, Sajjad Mustafa Syed, revealed during a media briefing that a single hour of internet disruption results in losses exceeding $1 million for the sector, including export-driven businesses. This issue is not just financial but also impacts the country’s reputation as a reliable IT service provider.

Mr Syed highlighted that authorities had acknowledged the impossibility of banning Virtual Private Networks (VPNs) due to the lack of legal grounds. He noted that frequent slowdowns and unannounced internet disruptions are causing substantial harm to IT exports. “A one-hour slowdown might seem insignificant to locals, but it can disrupt critical operations in sectors like stock markets, airports, and banks abroad,” he explained. Such incidents shake clients’ confidence and can prompt them to shift their business to competitors in other countries, making it difficult for Pakistan to regain their trust.

Pakistan’s IT Sector Suffers $1 Million Hourly Loss Due to Internet Disruptions

P@SHA’s internal survey revealed that many of its members have faced financial setbacks due to internet outages, with foreign clients raising concerns. As a result, several IT companies are relocating their operations to other countries where reliable connectivity is assured. This exodus poses a severe threat to Pakistan’s IT export potential.

Mr. Syed emphasized the need for a comprehensive plan to address these challenges. He proposed streamlining VPN registration through certified service providers, which could not only address national security concerns but also create a new business avenue. P@SHA has shared this proposal with the Pakistan Telecommunication Authority (PTA) and the Ministry of IT.

According to NetBlocks’ Cost of Shutdown Tool, a complete internet outage for one hour in Pakistan could result in losses of approximately $2.21 million. A Pakistan Institute of Development Economics report further estimated that the daily closure of 3G/4G services costs businesses around Rs. 1.3 billion in direct losses. These figures exclude indirect losses, which are difficult to quantify but equally detrimental to the economy.

See Also: Internet Disruptions in Pakistan: Government Downplays Concerns Over National Firewall

The IT industry is one of Pakistan’s fastest-growing export sectors, with 55% of exports directed to the United States and 20% to Europe. Asia-Pacific and the Middle East account for the remainder. To maintain this growth trajectory, Mr. Syed stressed the importance of adopting robust IT security systems akin to those implemented in the US and Europe, rather than emulating restrictive policies seen in countries like North Korea.

P@SHA has called on the government to prioritize uninterrupted internet services and address the concerns of the IT sector. Reliable connectivity is not just an infrastructure need but a critical element for sustaining and growing IT exports. A collaborative approach between the industry and authorities can help resolve security concerns without stifling economic progress. Failure to act promptly could result in irreversible damage to Pakistan’s IT industry, a cornerstone of its future economic growth.