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Pakistan’s Telecom Industry Faces Rs.12 Billion Annual Loss

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Pakistan's Telecom Industry Faces Rs.12 Billion Annual Loss

The recent nationwide slowdown in internet speed is causing significant problems across various sectors, including;

  • E-commerce
  • Health
  • Education
  • Finance
  • Public services.

The Telecom Operators Association (TOA) has asked Prime Minister Shehbaz Sharif to address this urgent issue.

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Key concerns include:

  • Impact on Telecom Sector Impact

Pakistan’s telecom sector is already facing financial strain. The recent internet slowdown will worsen this situation. Daily internet traffic has dropped by about 6,400 Terabytes. This slowdown is expected to cost the sector approximately Rs. 12 billion annually. This will add significant financial pressure on telecom companies. Additionally, the reduced revenue from the telecom sector is projected to result in a loss of over Rs. 3 billion annually for the government. The health of the telecom sector is crucial, as other industries depend on its infrastructure for their operations and growth.

  • Impact Freelancers

Pakistan boasts the fourth-largest freelancer community globally, which plays a crucial role in driving our IT exports. However, the recent internet slowdown has severely affected these freelancers, putting their projects at risk of termination or already causing project cancellations. Notably, Fiverr, a major marketplace for freelance IT professionals, has marked Pakistani IT freelancers as offline on its platform.

  • Impact on Business and GDP

The slowdown affects all economic sectors. A Deloitte study indicates that internet disruption in a smaller country can cost up to USD 3M daily. Pakistan’s larger population means the financial impact here is likely much higher.

  • Impact on IT Industry

To achieve our goal of increasing IT exports to USD 25 billion in the coming years, it is crucial to urgently restore internet speeds. Reliable connectivity is vital for maintaining a robust IT ecosystem. The current situation is so severe that, even beyond our future export ambitions, our existing IT exports are in jeopardy.

  • Impact on Blue-Collar Workers

The majority of the labour class—including plumbers, electricians, masonry workers, gardeners, and others—depend on the Internet to connect with customers and potential clients. Unfortunately, their ability to earn a decent living is now at risk. The internet slowdown is expected to have severe financial consequences for Pakistan’s lower middle class.

  • Foreign Investment

Foreign investors tend to avoid markets with underdeveloped communication infrastructure. In today’s digitally connected world, the internet is a crucial component of this infrastructure—arguably carrying more traffic than traditional roads and highways. The current state of Pakistan’s internet is likely to deter potential foreign direct investment (FDI).

The TOA urges the Prime Minister to take swift action to fix the internet issues, stressing that delays will have severe and lasting economic consequences. Telecom operators are ready to help resolve the problem and improve the situation.

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