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ICTs adoption must for development

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By Shahid Ali Butt

The Information and Communications Technologies (ICTs), being used for general public services and good governance are facilitating commoners and assuring ease in their routine lives. The dynamically evolving ICTs hold crucial importance in Pakistan as well as the world-over as one of the key sectors in terms of powering economies, acting as a catalyst of change.

In Pakistan, the Ministry of Information Technology and Telecommunications (MoIT&T) has maximized its efforts for expanding both the IT and Telecom sectors in tandem.

Consequently, the IT sector is exhibiting accelerated progress with a total turnover of US $ 3.1 billion including both exports and domestics revenues during the last one year. Through enabling policies and auction spectrum for next generation mobile services, the broadband penetration has jumped from a mere 3.7 million to 42 million.

The IT and telecom sectors are expanding and generating new jobs as businesses utilize modern ICT technologies such as e-commerce, e-banking, e-health, e-education, and business related to IT applications.

Minister of State for IT and Telecom, Mrs. Anusha Rehman, who is playing a key role in promotion of the sector, has said introduction of mobile broadband contributed a lot in connecting people and increased internet penetration from mere 3 per cent to 19 per cent in a short period.
She said the auction of spectrum fetched more than US$ 1.2 billion for national exchequer. In addition, around US$ 1.3 billion worth of investments were made in rolling out of 3G/4G networks and infrastructure.

She said the government of Pakistan Muslim League (Nawaz) had devised clear-cut programmes to translate telecom development into measurable socio-economic benefits of nation and in this direction a strategy was being pursued to achieve development targets including projected figure of additional employment creation while targeting 36 per cent broadband penetration.

The long awaited Digital Pakistan Policy 2017 has been released for which MoIT worked for several years, consulted all sorts of stakeholders and worked on almost every aspect to adequately address and improve international rankings in governance, entrepreneurship, knowledge capital, accessibility, demand stimulation and ICT skills.

The IT policy focuses on four broad areas for implementing the policy imperatives and these are Sectoral Digitzation, Cross-Sector Collaboration, IT Sector Sustainability and Entrepreneurship and Innovation.

Meanwhile, telecom experts were of the view that Digital Pakistan Policy would serve as the foundation pillar for construction of a holistic Digital Ecosystem in the country with advanced concepts and components for rapid delivery of next generation digital services, applications and content. The policy minutely suggests areas for legislation and need for enhancement of systems, ranging from human resource development to research and innovation in IT, to help meet the goals while overcoming the challenges. The Ministry of Information Technology is also developing an ‘Action Plan’ along with relevant ministries and departments detailing the timeframe and outputs of the Policy.

When contacted, Chairman Pakistan Telecommunication Authority (PTA), Dr. Ismail Shah expressed his optimism and said for the consumers, availability of high speed mobile broadband services in both urban and rural areas has been encouraging more connected community and promote e-commerce related activities. Next generation mobile services are considered an enabler towards GDP growth and help introduce more innovative e-services.

The recent statistics have revealed most of the government departments have their own websites that provide information and downloadable material for public use.

The key initiatives taken by MoIT for promotion of the sector are bearing fruits as Pakistan’s ranking on Financial Action Task Force (FATF) list has improved from Grey to White which will enable entry of credible international players like PayPal. Presently, MoIT, in-consultation with relevant stakeholders, is in process of formulation of e-commerce regulatory framework for its proliferation to safeguard interests of users. The initial draft is being finalized through stakeholders’ consultation. Once finalized, the same shall be incorporated in National E-Commerce Policy.
Moreover, the Ministry is also working on formulation of a legal framework for protection of personal data of individuals in Pakistan. The framework is expected to clearly lay out privacy
rights of individuals and responsibilities of data processes in order to ensure greater legal certainty in this area.

The Ministry is also in process of rolling-out e-Office suite in federal government to ensure efficiency, accuracy, effectiveness, good governance, transparency and accountability in decision making and delivery of efficient and cost effective public services.

The telecom sector has shown positive growth during first nine months of last fiscal year. Total tele-density including mobile phones has reached 72.41. The tele-density of mobile phones has touched 70.85 % mark till June this year.

Revenues from telecom sector reached an estimated Rs. 234.9 billion during first two quarters of 2016-17. The commercial launch of 3G and 4G services has opened new opportunities for revenue generation for mobile operators. Availability of 3G and 4G services has enabled development of new applications and database services, and people are quickly adapting to these new technologies and services.
Moreover, the telecom sector – a significant source of revenue generation for national exchequer – contributed estimated Rs. 53.76 billion in terms of taxes, regulatory fees, initial and annual license fees, activation tax, and other charges during first two quarters of last year.

There has been a consistent growth in IT remittances over last decade at a Compound Annual Growth Rate (CAGR) of around 23 per cent. There has also been an impressive growth rate of approximately 97 per cent in IT remittances over last four years.

Hence, IT exports are estimated to have crossed US $ 2.8 billion a year at present as per estimation standard of Bearing Point while annual domestic revenues are around US $ 500 million.

Total revenue of IT industry is estimated to be around US $ 3.3 billion a year at present.
The reported Foreign Direct Investment (FDI) inflow in ICT sector for period July 2016-March 2017 is US$ 55 million. In terms of overall investment in telecom sector, the momentum that was started in 2013 to upgrade networks for 3G and 4G services has continued.

The telecom operators have invested a significant amount of US $ 287.6 million first six months of previous year. By June 2017, total number of mobile subscriptions has reached 139.76 million with net addition of more than 6 million subscribers during one year. Biometric re-verification of SIMs had an unfavourable impact on cellular subscriber base. However, the industry has survived through tough period and continues to regain subscribers at a fast pace.

The 3G and 4G subscribers have reached 42.08 million by June 2017. More coverage and reduced tariffs will further increase pace of 3G and 4G subscriptions. The total broadband subscriber base also showed strong growth during 2016-17. At end of March 2017, broadband subscribers stood at 42.36 million as compared to 32.29 million at end of last fiscal year depicting 31 per cent growth.
The subscriber base of Local Loop segment has reached 3.11 million at end of December 2016 while Fixed Line subscribers base has been relatively steady with 2.79 million subscribers.

Wireless Local Loop (WLL) subscriber base dropped to 0.39 million during first two quarters of 2016-17. The closure of PTCL’s WLL connections and mobile substitution effect has resulted into gradual decline of local loop subscriptions.
When contacted, a senior official said MoIT continues to support all credible private sector initiatives, aimed at bolstering local IT industry and attracting foreign investment.

The government realizes that it has an important role in terms of providing a conducive environment through infrastructure and human resource development. The incentives for IT industry include zero income tax on IT exports till June 2019, 100 percent equity ownership allowed to foreign investors, 100 per cent repatriation of capital and
dividends allowed, seven years tax holiday for venture capital funds.

The sources said in order to provide opportunities to young entrepreneurs and talented youth and equip local IT industry with infrastructure, mentorship and all allied facilities, National Incubation Centers (NICs) are being established to assist in channeling entrepreneurial drive amongst young graduates of the nation. The launch of NICs in Karachi, Lahore and Peshawar is yet another important milestone in government’s digital agenda.

National ICT Internship Programme has been launched to provide opportunities to unemployed youth to get professional experience as well as potential for future job placement.

Moreover, to connect unconnected in unserved and under-served areas, projects are being rolled out for provision of 3G telephony and broadband services in Balochistan and Khyber Pakhtunkhwa (KPK). The total worth of these projects is around Rs.12.6 billion.

Similarly, in order to minimize information and communication gap (the digital divide) between rural and urban communities, 500 Universal Tele-centres are being established through Universal Service Fund (USF) across the country.
A new IT Park in Islamabad is being established under financing from Korea Exim Bank through Economic Development Cooperation Fund (EDCF), spreading over an area of 47.7 acres of land. It is expected that construction of IT Park will be completed
by 2020. The IT export houses and companies shall be allowed to open Foreign Exchange Accounts in Pakistan while start-up software houses shall be exempted from income tax for the first 3 years. In addition to IT companies, these incentives will also be available for IT-enabled services.

A comprehensive national level technical training programme for freelancers has been planned to train approximately one million freelancers within the span of two years while a nation-wide “ICT for Women Entrepreneurship Development Program” has already been launched to tap entrepreneurial potential of women.

The above mentioned key initiatives, aimed at capitalizing on potential of ICTs are no doubt in right direction to achieve targets and make Pakistan economically strong and stable.

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