The Cost of Limiting Connectivity – Business

A smart person learns from the mistakes of others, while the simple soul learns only by making the same mistakes himself. Or so the saying goes in Urdu.

But there are also many people who never learn, just like the people who govern Pakistan and who enjoy repeating the same self-destructive actions without ever considering the consequences.

In case you were wondering, I was referring to Pakistan’s repeated adventures with the internet. Even a decade after this obsession first began on a large scale, the powers that be are still as serious about repeating the same blunders, only this time bigger and better. Whether it’s willful ignorance, brazen arrogance or plain old incompetence, no one knows.

What we do know is that the authorities — whoever is in charge — have been restricting connectivity for over a year, right around that fateful day we shall not name. It has happened to everyone: at home, in the office, or on the road. It does not matter whether you rely on fixed or mobile broadband.

There was already a long list of websites that Big Brother had flagged for us more than a decade ago. But to ensure that life goes on, they started adding social media to that list. The first victim was X, an obvious easy target because people there have the audacity to not only have opinions, but to express them. Imagine the horror.

In FY23, data accounted for nearly two-thirds of mobile telephony revenues, amounting to a daily average of Rs1.51 billion

WhatsApp seems to be next in line, with users repeatedly experiencing issues sending or receiving media files, such as voice messages or images, over mobile data.

Ignore all the boring stuff like “digital rights” for a moment, which is inevitably going to get sidelined anyway, and focus on the hard numbers. Pakistan has made great strides in expanding internet access, with broadband penetration at 57.05 percent in FY24, up from 32.55 percent in FY19. However, of the 138.3 million connections, over 97 percent are mobile.

This same majority also happens to be the first and biggest victim, since a significant portion of the government’s efforts to manage the internet goes to mobile phones. Think of the Bykea rider who uses WhatsApp to send voice messages or a worker who can’t read or write and this is their best communication platform.

On the bright side, the overlords have finally noticed that something is amiss. Last week, the Senate Committee on the Minister of Information Technology held a hearing on the matter and sought responses from the two regulatory stakeholders, namely the Telecom Authority and the Ministry of Technology. Reportedly, this delay could be due to the government putting up a firewall or upgrading its “web management system.”

Apparently, it’s a routine event that’s being undertaken to protect the country’s cybersecurity interests. Even if we take the claim literally, we’re over a year into it — I mean, someone needs to talk to their technology partners and commend them for the agility of their execution.

To state the obvious, such actions have implications that go much further. For starters, we have a struggling telecoms sector where one multinational has already exited the market, while others struggle to improve their average revenue per user. Data, and the services built on it, are their best chance to show their sponsors abroad meaningful growth in dollar terms.

Not surprisingly, throttling and/or blocking mobile broadband has a major impact on telcos’ topline. In FY23, data accounted for almost two-thirds of mobile revenues, translating to a daily average of Rs1.51 billion. This is roughly the loss the industry has to bear when authorities tinker with the internet.

According to Cloudflare, Pakistan’s download speed was only 22.3 Mbps, lagging behind competitors like Nigeria (26 Mbps), Indonesia (31.5 Mbps), and the Philippines (97.4 Mbps). In such an environment, telecom companies need to invest more to upgrade their technology and infrastructure. But of course, the government leaves them with little to go around after taking 35% in taxes and then some more through internet throttling and disconnections.

It’s hard enough to generate optimism about “Brand Pakistan”. Various industry bodies, from the prominent Overseas Investors Chambers of Commerce and Industry to the Software House Association, are warning of the dire consequences. Sure, some may be exaggerating, but the erosion of confidence has become far too obvious to ignore.

We’ve known for decades that relying on the government for anything is futile. Electricity? Buy that emergency generator or UPS. Water? Call the tanker mafia. Education? Empty your pockets and send your kids to private school. Health? Well, die. But by and large, people have grudgingly accepted that in the private republic of Pakistan, you can at least pay to get what you want. However, no amount of money seems to be enough for reliable internet anymore.

The author is co-founder of Data Darbar

Published in Dawn, The Business and Finance Weekly, August 19, 2024