In Pakistan, decades-old suppressed demand provided fertile ground for the entry of cellular telecoms aided by a progressive regulatory environment. By and large, a happy balance was wrought between attracting investment to the sector, protecting consumer interests and creating competition especially after the industry was restructured and deregulated in 2004. The PTA (Pakistan Telecommunication Authority) had the advantage of regulating an industry that was new and growing, fully privatized with an efficient and profitable revenue stream able to fund its own infrastructure. As the technology was new, expert market development advice was sought and adhered to over the years, thus avoiding pitfalls that encumber other utilities. In truth, the telecom industry also became a cash cow, garnering millions in foreign currency via licenses and spectrum auctions. It was one of the largest sources of FDI in years past.
However, competition has driven pricing downwards. The industry is having to consolidate as the average revenue per user is stubbornly low at $2 per month and it complains with justification that it now carries an unfair burden of indirect taxation in comparison to other sectors. True to form, taxation policies remain intent on raising easy revenue rather than being mindful of the long-term implications for quality of service or growth of the sector. But the saving grace is that exponential advances in technology, its scale up and world-wide competition keep driving costs down. Data is faster and cheaper to transmit since different data sets can be sent over multiple ‘channels’ over the same piece of wire or optical fiber line. The industry is gambling that the evolution from voice to data will ultimately come to pass following the pattern in developed markets.
Cellular Mobile Operators and Internet Service Providers now provide fixed and mobile broadband (fast internet) data services, demand for which is increasing at the government, business and consumer levels. Faster internet speeds have made the browsing, download and communication experience much more satisfactory and will encourage more consumption of broadband data.
Other developments have reinforced uptake. A smart phone today incorporates billions of dollars worth of computer capability development over decades. But around 2011, computer chip makers started to sell chip sets off the shelf. Coupled with Google’s free Android operating system and Chinese entrepreneurship, smartphone prices crashed, making them much more affordable than the leading Apple and Samsung phones. The introduction of 3G/4G networks and the skyrocketing popularity of smartphones as a single device to access the internet via mobile broadband as well as VOIP (Voice Over Internet Protocol) services such as Skype, WhatsApp, Viber and Veon will further enable data services to proliferate. The practicality and convenience of new ways of doing business like banking and money transfers, bill payments, shopping, booking travel, ordering meals, finding our way, hailing a cab, getting streamed entertainment or simply accessing and sharing news and information etc. is catching on despite the fact that Pakistan is woefully handicapped by low education and literacy standards.
Infrastructure development continues apace. A new 820 km fiber optic line is being laid to improve connectivity with China (and the world) under CPEC which should also the improve redundancy of Pakistan’s submarine cable links as well bring new infrastructure for faster communication in the northern areas. Tower sharing is the likely next big development as the data transmission requirements for 3G/4G is likely to lead to a densification of the higher frequency wireless networks i.e. more cell sites and in filling to optimize speed, quality and volume.
Despite all of these developments, Pakistan scores poorly on the International Telecommunications Union’s “Measuring the Information Society Report 2017”. It ranks at 148 in the world (behind Mongolia at 91, Sri Lanka at 117, India at 134) on the basis of the ICT Development Index which measures access, use and application and available skills relating to ICT. Any advantage through infrastructure and bandwidth access is diluted without a focus on skills and education. Techno-optimists suggest that IT is as transformative a general-purpose technology as was electricity when its use became widespread during the first half of the 20th century and led to widespread prosperity. While IT is envisioned as the great equaliser, it disproportionately benefits those who are able to master it and has the potential to exacerbate existing social divisions. There is a digital divide between rich and poor nations, but it also exists within our society.
But it is not all bad. Industry insiders tell me that slowly but inexorably, the digital future is coming to Pakistan as resources are being spent and there are already some bright spots including the government’s efforts in bringing e-efficiency to many citizen-centric services like paying taxes, applying for a driver’s license or registering a FIR. Most impressive are attempts to reboot the public education system and here the Punjab Information Technology Board has had a role in introducing smart monitoring of over 52,000 public schools in Punjab. Its 950 monitoring assistants send real-time information on key metrics as well as photographic evidence via SIM-enabled tablet PCs which can then be analysed and presented as a dashboard with a claimed drill-down capability. Education is one area which stands to benefit enormously from a variety of digital initiatives, including tablet-based e-learning.
The Internet of Things (IoT), which is just one of the latest buzzwords within an industry that prides itself for its confusing jargon, has also arrived in Pakistan. Take for example, your smart TV or set top box that connects via Wi-Fi, enabling data-heavy video streaming and entertainment content to be downloaded or directly played. Now expand this idea to multiple man and/or machine or device (things) interactions designed to bring efficiency or convenience to our lives.
It is said that any device which has an on and off switch could potentially be connected to and talk via the internet to other devices using data analysis to predict our needs or coordinate our lives. So pervasive will this technology become that the ICT consultancy Gartner has forecast at least 26 billion device connections in the world by 2020! Uber and Careem are an example of the phenomenal success of the IoT platform in the country. They are seeing hyper growth in the double digits per month and together are reportedly on course to generate business in excess of Rs50 billion in Pakistan by next year and are already impacting vehicle sales.
Deficient or unprepared, we cannot escape the march of time and are indeed at the cusp of graduating to the ICT age with its momentous and possibly worrying implications as Artificial Intelligence develops and computer take on tasks which are not merely repetitive but imitate the human cognitive ability. Beyond that, Ray Kurzweil, the director of Engineering at Google who is an author, inventor and celebrated futurist, predicts that by 2045 we will reach a point of Singularity when technology becomes smarter than humans (see futurism.com). But that I can confidently predict it is not a problem for my generation. That said, the time has now come to give up my legacy telephones and think about selling my car.
Pakistan population = 200m
60% in the 15 to 29 age group
> 2000 IT companies
20,000 IT graduates and engineers produced each year
14 Software Technology Parks
IT exports to $2.4 billion
Revenues from freelancing $90m
Cellular mobile companies imports Rs78b
SOURCE: Digital Pakistan policy draft 2017, MoIT
The author was formerly CEO, Dawood Hercules Corporation Ltd