Telecom industry bemoans political uncertainty, low return

Pakistan’s telecommunication industry has cited political uncertainty, low returns and dollar-denominated spectrum auction fee as major hurdles, which slow down its growth.

Discussions with telecom industry experts revealed that the installation of a firewall was another challenge that contributed to slow internet speed, causing a major setback to the industry and consumers alike.

They said that there were only two countries – Myanmar and Nigeria – where hurdles to internet speed were being experienced but no other developing country had such an issue.

Even Iran, under sanctions imposed by the US and European countries, has good internet speed, which is better than Pakistan. Freelancers and entrepreneurs in the information technology sector encountered such challenges and many lost their international clients. Additionally, several IT businesses shifted to the United Arab Emirates, they said.

Even those companies that had servers in Pakistan suffered a lot due to the installation of the firewall. However, some officials of IT companies claimed that there had been a phase during the installation of the firewall, which slowed down internet. But now the speed has come to normal.

Telecom companies regretted that an uncertain political situation and policy inconsistency posed major challenges. In that regard, they quoted the example of India, which had already launched 5G technology and its telecom sector grew in the wake of consistency of policies.

A low return on investment is another obstacle that impedes growth of the telecom sector. According to industry players, the average revenue per user is around $1 in Pakistan, lower than roughly $1.6 in India and $1.4 in Bangladesh.

They mentioned that screen time in Pakistan had been two hours when 4G was deployed and it went up to seven to eight hours in 2025, increasing the cost for telecom firms. But average revenue is still at a low level, causing difficulties to all telecom operators.

The industry pointed to an anomaly where the government was charging spectrum auction fee in dollar while telecom companies were earning in rupee. They called it a mismatch that the government should address in its policies.

In September 2021, the government had announced the spectrum auction, where only Ufone, in which the state held a stake, participated and won the spectrum.

Industry officials claimed that India had subsidised the spectrum for a certain period and charged fee later. However, the Pakistani government is collecting the fee in dollar instead of subsidising it.