World’s 7th Fastest Growing Mobile Market-Pakistan Off to a brighter future Challenges Ahead

Digital development can drive upgraded engagement between individuals and institutions, offer huge growth potential and productivity gains in all sectors, and enable more advanced and hi-tech government services. Despite being a late entrant in mobile broadband world, Pakistan has become one of the fastest growing economies and newest destination for the ICT industry.

World’s 7th Fastest Growing Mobile Market-Pakistan Off to a brighter future Challenges Ahead

The technology potential in Pakistan is so huge that it can supersede the technological evolution of the west, making the country one of the most digitally integrated economies in the world.

Technology potential in Pakistan is huge to make the country one of the most digitally integrated economies in the world

Therefore, with its Vision 2025 strategy, Pakistan targets to achieve a more knowledge based economy, creating a worldwide competitive and flourishing country that carries a high value for the people. This vision is equally supported by the regulator’s i.e. PTA own vision for the year 2025.There are few challenges that still need to be addressed on priority so that Pakistan could truly benefit from its actual ICT potential.  So let’s look at some of the major trends and the challenges that the Pakistan ICT industry is facing and that needs to be address in the near future.

Mobile Trends: Intensifying the Digital Explosion in Pakistan

In the last few couple of years, the growth in Pakistan’s domestic ICT market has been quite impressive despite challenging political landscape. According to GSMA’s Intelligence report in 2016, Pakistan was forecasted to add 22 million mobile subscribers during 2015 to 2020, ranking Pakistan as the 7th in the fastest market for mobile growth in the world.

However, local industry analysts feel that international media and even GSMA figures often understate the development whereas, the mobile industry phenomenal growth over the past two year proved it otherwise. The industry has not only surpassed those figures adding exactly 22 Million mobile subscribers but has also achieved 37.7 million broadband subscribers (almost double the mobile subscribers forecasted by GSMA). With more than 1/3 of the total population comprised of youth aged below 14 years (who are not supposed to carry mobiles), the penetration of both mobile and mobile broadband subscribers will be much higher.

The existing and future Total Assessable Market (TAM) for mobile will further expand and likely to add an additional 20 million mobile broadband subscribers by 2020. In real terms this would be three times of the GSMA forecast and will probably rank Pakistan as the 4th most aggressive market in terms of growth potential. While we will continue to ride on the Pakistan ICT growth and the potential it presents, we need to support this growth by introducing related technologies in the country.

Most of the time Pakistan ICT growth figures are understated even then globally it ranks 7th fastest market for mobile growth

Globally, 2017 will be a landmark of innovations within the IoT ecosystem. It will reshape the way businesses, consumers and governments will interact across various factors. IT boom is on rise worldwide, similar trends can happen in Pakistan as well; for that private and public sector will have to play its part.

Saving and Strengthening the National ICT Assets

In most countries, national operators and manufacturing hold the strongest position in the market as it is the responsibility of the Government to provide affordable and contemporary services to the people. But unfortunately over a period of time, this has slipped from our hands. Pakistan’s national operator PTCL and its subsidiary Ufone, SCO and now NTC seem to be the weakest and most vulnerable among the fixed and mobile industry players. Similarly, TIP, the manufacturing arm for Telecom & related products has been on the decline for quite some time now and each year Government has to support it financially.

Mobile growth has surpassed all industry estimates  reaching 37.7 million MBB subscribers

PTCL is the largest fixed operator in Pakistan offering an array of services including fixed line voice telephony, Wireline and Wireless broadband internet, multimedia services, variety of corporate solutions for businesses and enterprises but still its financial situation has nose-dived over the years. Similarly, Ufone has the weakest position among all mobile operators with the lowest number of subscribers after Warid merged into Mobilink.

Pakistan’s national operator PTCL, Ufone, SCO and now NTC seem to be the weakest and most vulnerable among the fixed and mobile industry players

The turning point for Ufone was the failure to get reasonable spectrum in the NGSMA held in May 2014. Its subscriber base was around 18 million by the end of December, 2016; falling from 19 million in January, 2016, while other competitors grew tremendously in the same time frame. The row around USD 800 million of the unpaid privatization proceeds between the shareholders continues to haunt the otherwise efforts made to recover both companies.

GoP needs to save Ufone & PTCL from shedding asset value or an eventual demise as well as enhance the mandate of the SCO and NTC to face the challenges of tomorrow

The important thing to realize is that if the status quo continues both the shareholders i.e. Etisalat, Government of Pakistan and importantly the company itself will have to lose more than the actual value of the dispute. It could soon find itself in a situation like PIA and Steel Mill unless salvaged on emergency basis. While the onus for fast recovery if any, rests on both shareholders, the Government should take initiative being the major shareholder to save it from shedding its asset value or an eventual demise.

Similarly, the mandates of the SCO and NTC both need to be enhanced and their long term strategies chalked out to face the challenges of tomorrow.  The other asset that has already depleted is the Telephone Industry of Pakistan (TIP). This could possibly be turned into a women IT University, IT Park or even better, a combination of both. It would be a win-win situation for all stakeholders i.e. Government, existing employees, ICT Industry and also the community.

Uplifting Pakistan’s ICT brand

Like Telecom, IT industry of Pakistan is also going through a major transformation. According to SBP statistics, the IT industry made $560 million during FY 2015-16 in software growth and IT enabled services outsourcing. There are numerous Pakistani startups and IT entrepreneurs that got international recognition for powering global industry. Folio3, Pepper.pk, Cricket Revolution, Tintash, Mixit, Softech, TPS, Avanza, SiS, Electronic Services Pakistan (ESOLPK) and Kobat International are few of the companies that proved their metal in international gaming, health and financial service sectors.

Pakistan has more than 2500 software houses, pool of skilled and educated IT workforce, number of IT parks are also under development. To promote the IT industry at home, government is offering exclusive incentives including 100% repatriation of profits and equity allowed to foreign investors, zero taxes on IT exports till 2019 and 7 year tax holiday for venture capitalists.

Letting the world know about the ICT potential and opportunities in Pakistan will provide the basis for attracting foreign investment and strengthening the industry

To further support the IT industry government needs to work on building a favorable image of Pakistani IT industry in the international arena to attract foreign investment. Pakistan has got more than its share of bad publicity and needs to present its true case for which brand elevation will certainly play a big role. The Government needs to play an active role in engaging with international IT companies and participate more proactively in international events such as MWC, GiTEX, CES, CeBIT, CommunicAsia etc. It should position CPEC as a major trade and commerce activity that will benefit ICT companies.

The sooner we embrace the new trends, the faster we will complete the digital transformation

While, the Indian Prime Minister, hyped up its 100 Smart Cities and played a monumental role in IT growth that practically didn’t exist, we have a much better case to plead which is based on reality. We must engage with the Global IT Industry to attract them to take part in Pakistan’s tech boom. Prime Minister Nawaz Shareef’s recent meeting with e-commerce giant Jack Ma and Bill Gates are one such example and such interactions needs to be prioritized at all levels.

Letting the world know about the IT potential and opportunities in Pakistan will provide the basis for attracting foreign investment and strengthening our industry therefore, government needs to step up its efforts in marketing its IT potential.

Implementing Futuristic Telecom and IT Policies

Policy making is a serious and time consuming task as it requires the entire sector to work together and come up with something that can elevate a country’s overall performance. Telecom Policy was finally approved back in 2015 whereas; IT Policy is still in the pipeline. It is important that upcoming IT policy incorporates all the global tech trends and new technologies as a proactive approach to keep abreast with the future technologies in the country. Development of a comprehensive policy, keeping in mind the future trends will overcome the need of policy revision in coming years, which again could be a resource and time consuming task.

It is important that upcoming IT Policy incorporates all the global tech trends and new technologies as a proactive approach to keep abreast with the future technologies in the country

Policy formulation is indeed an important task but its appropriate implementation is equally important. Therefore, the challenge for the ministry and especially the regulator which implements most of the policy directives is to develop a comprehensive policy time frame to ensure that process of policy implementation continues without any blows; for that proper allocation of monetary and human resources will be of utmost importance. It is highly important to allow opportunities so they won’t become missed opportunities.

Pakistan Telecom and IT is going through a historical phase which will set the base for a digitalized society in future. With increased investments and trade barriers falling even further, Pakistan’s untapped ICT industry presents a very lucrative market for the world.  The sooner we embrace the new trends, the faster we will complete the digital transformation.