Multiple concerns on stagnant IT and telecom sector

PAKISTAN WITNESSED a high boom in its IT and Telecom sector from 2001 to 2005 with remarkable investments to the tune of Rs 9 billion mainly due to the successful implementation of reforms in the country. No doubt that Pakistan had secured the top notch among the South Asian states in terms of growth rate in addition to production of highly skilled manpower and availability of IT and telecom services on comparatively cheaper charges in the world market. However, since the last couple of years the positive trend in foreign direct investments in this sector has witnessed a steep downfall multiplying the serious concerns of the private sector stakeholders. Undoubtedly, this is not the question that the local IT and telecom sector has lessened its potential or human resources, as still Pakistan enjoys the status as a rich market for a robust infrastructure and skilled manpower. In addition the country is geared to position itself as the regional hub for IT and Telecom services, research and development (RandD) activities. However, now the situation has entirely changed in terms foreign direct investments. Unfortunately, for the past three years, unwarranted complacency and vested interests have arrested rapid growth in the telecom industry. The Economic Survey of Pakistan 2011-12 reveals that total investments in the telecom sector were around $495.8 million in fiscal 2010-11, as compared to $1,137.5 million in fiscal 2009-10. These statistics show that fiscal 2010-11, total investments in the telecom sector fell by 56.4 per cent. This negative trend is leaving bad impacts on the local IT and telecom sector in terms of stagnation in economic growth, increased joblessness as well as grave concerns among the stakeholders who have put in huge investments. The governments lethargic attitude, regular delay in launching 3G technology, increased ratio of tariffs, tough but unofficial procedures of getting multiple licenses all have contributed towards keeping foreign direct investments away from Pakistan. Presently, the mobile phone users are accumulatively paying more or less 32 per cent tariffs in various heads which are of high rate in the world. Especially mishandling of the 3G license auction has triggered grave concerns and reservations among the local service providers as well as those foreign companies, mulling to participate in this auction, about the transparency of this whole exercise. At this stage, the authorities need to reshuffle their priorities and save the IT and telecom sector which is still a substantial revenue generator as during the year 2010-11 it had contributed around Rs363 billion to the national kitty. At the same time it should also rationalise the tariffs ratio and take immediate initiative for the launch of the 3G technology in the country as it would trigger economic as well as development boom.

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