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Glowing role of telecommunication sector in growth of Pakistan

Published on 1st Dec, Edition 48, 2014

 

Pakistan has been faced with a number of problems which include prolonged energy crisis, instability on the political front, a volatile security situation as well as questionable governance, all of which have caused hurdles for the country in being able to attract foreign investors.

Despite these issues, however, the telecommunication sector seems to be doing well and is considered to be a rather lucrative business. Firms seems to be expanding their operations in this untapped and profitable market, which can be backed up by the Foreign Direct Investment being reported by the State Bank at a value of $20 million in the last financial year and in the four months of the current financial year.
Telenor and its business in Pakistan can be taken as an example to exemplify the state of the telecommunication sector of the country. Telenor is a Norwegian brand, which has operations throughout Asia and Europe and is considered to be amongst the world’s leading service providers. In March of the upcoming year, the company would have completed a decade since their launch in Pakistan and while it was the 6th entrant into the sector when it launched its operations, it now has around 36 million GSM customers. The brand is working towards building their own head office, having an investment of $70 million, having already invested $2.2 billion in the country with investments of the same magnitude expected in the upcoming future as well. The brand has also invested in the 3G license with 3G sites being built throughout the rural and urban areas of the country.

Furthermore, the efforts being taken by Pakistan in terms of promoting its telecom sector are also being recognized. On the 27th of October, the nation was elected to be part of the ITU Council, which is the telecom industry’s global governing body. The sector in the country is taking a lead in ensuring that financial inclusion is ensured, which is an essential component of economic growth, can be attained.

Companies such as IBM and Oracle Inc. which are large players in the global IT market believe Pakistan to have great potential for business, having great scope, good opportunities and high returns. These companies are of the opinion that Pakistan can allow their business to flourish in the country in a steady and rapid manner. This is because despite the harsh economic conditions being faced by the nation, the IT industry of the country has not experienced any stagnant business prospect till now.

Today, Pakistan is considered to be amongst the few countries which were the first to get digital telephone exchange technology which came through Germany in the 1980’s. During this time, not only was Germany still in its infancy but other developed countries too was relying on old technology based on conventional analogue exchanges. It was the wisdom and the vision of the Government of Pakistan at that time, which made such a positive decision which has allowed the country to have an outstanding global ranking as being amongst the first nations to have achieved digital telecommunication. Germany too must be saluted for providing Pakistan with the Siemens technology.

 

In a two-day investor conference held in Islamabad, the Minister of State for Information Technology and Telecommunications stated that Pakistan has huge potential for profitable business ventures and for investment in the telecommunication sector of the country. She also said that foreign investors can and should take advantage of the opportunities which the country’s IT sector has to offer. Investments can be brought in and made in the manufacturing of mobile handsets, which would be compatible with 3G and 4G technology and would be the next move since advanced telecom services have been launched in the country.

The Minister also spoke of the various investment opportunities the country has to present along with the policies, which would make it easier for the investors to bring their business into the country. She said that the country has some of the most liberal investment policies and the government of the country gives a great deal of importance and priority to the development of information technology and the sector in order to not only provide good quality services but to also generate employment and help in the reduction of poverty.

The existing level of the penetration caused by broadband in almost 190 million people in the country suggests a positive current standing of the sector along with suggesting positive future prospects making it an ideal opportunity for investments and the growth of telecommunication operators in the country along with the manufacturing of handsets and setting up Software Technology Parks.

Ever since the spectrum auction, the demand has increased for devices which are enabled for use with 3G and 4G services. Such achievements and developments in the sector are attributed to the vision of the Prime Minister who believes that the IT sector is amongst the most important channels in the country, which can bring about empowerment to the nation with particular reference to the youth of the country.

Focus is also being placed on disadvantaged communities with rural areas to soon get almost 500 tele-centers, which the IT Ministry is establishing jointly with the Universal Service Fund. Initiatives such as the set up of technology parks is also being undertaken along with accelerated digitization, research and innovation centers as well as local manufacturing units. It is also possible that the sector would be cooperating with other countries to further develop and progress.

The potential is great for the telecommunication sector of Pakistan which is clear by the kind of work the sector has managed to accomplish and the kind of progress it is making. With initiatives such as those mentioned taken on a larger scale, the IT sector of Pakistan has the potential to become one of the strongest. The job being done by the Ministry is definitely commendable and helps in showcasing the country in a positive light.

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