The recent nationwide slowdown in internet speed is creating multifaceted challenges for all sectors including commerce, health, education, financial & banking, and public sector operations.
The Telecom Operators Association (TOA) has appealed to Prime Minister Shehbaz Sharif to intervene and resolve the ongoing internet slowdown crisis.
They highlighted the following issues:
- Impact on telecom sector: Unfortunately, the financial condition of the telecom sector in Pakistan is already challenged; the recent internet slowdown will further deprive the sector by approximately Rs. 12 billion (on an annualized basis) due reduction in internet traffic – due to the slowdown in the internet speed, daily internet traffic in the country has reduced by approximately 6,400 Terabytes. This will significantly increase financial stress on the telecom sector. Incidentally, the corresponding loss to the exchequer due to reduced revenue of the telecom sector will be more than Rs. 3 billion annually. The health of telecom sector is important because other sectors rely on telecom infrastructure for their operations and growth.
- Impact on freelancers: Pakistan is home to the 4th largest freelancer community in the world, and this community contributes significantly towards our IT exports. The internet slowdown has gravely impacted freelancers – their projects are at risk of termination or have been terminated. Fiverr, one of the largest marketplaces for freelance IT workers, has changed the status of Pakistani IT freelancers on its platform to offline.
- Impact on business and national GDP: The internet slowdown is adversely impacting all sectors of the economy – may it be education, health, commerce, banking and financial services, manufacturing, e-citizen services, etc. A recent Deloitte study has shown that internet disruption in a small country (population of 40 million, per capita GDP of USD 6,000, and broadband penetration of 5%) can adversely impact the national economy by up to USD 3M per day. And since Pakistan has a much larger population, the negative impact on Pakistan’s economy will be much greater.
- Impact on the IT industry: If we are true to our aspiration to grow our IT exports to USD 25B in the next few years, then immediate corrective measures to restore the internet speed in the country are imperative on a war footing because proper connectivity is essential to sustain an IT ecosystem. The current situation is so dire, that setting aside future IT export aspirations, current IT exports are at risk.
- Impact on the blue-collar workforce: The vast majority of the labor class (plumbers, electricians, masonry workers, gardeners, etc.) rely on the Internet to communicate with their customers and prospects. Unfortunately, currently, their ability to earn an honest day’s living is on stake. Pakistan’s lower middle class will experience adverse financial repercussions stemming from the internet slowdown.
- Impact on new FDI: Foreign investors shy away from markets that have underdeveloped communication infrastructure. In today’s digitally connected world, the internet is at the top of communication infrastructure – one could argue that digital highways carry more traffic than traditional roads and highways. The current state of Pakistan’s internet will act as a deterrence in attracting new FDI.
“Therefore, keeping in view the reasons stated above, we request that the Prime Minister evokes an urgent call to action to immediately identify and rectify any technical issues that have caused the internet slowdown. Any delay in this will have a significant and long-lasting economic repercussion for the country. Telecom operators, as part of their national duty, are willing to participate in a dialogue and assist the relevant quarters in finding solutions to improve the current internet slowdown situation,” the association added.