Pakistan

The Cost of Internet Shutdowns: Pakistan’s Rs820m Loss and Long-Term Impact

Pakistan’s internet blackout, resulting from political escalation, has caused significant financial losses to digital service providers, the government, and the general population. The country witnessed a suspension of mobile broadband services, resulting in a revenue loss of Rs 820 million for the telecom operators, while the government lost around Rs 287 million in tax revenue. The IT industry, which is already facing pressures due to bad governmental policies and a lack of continuity, has come to a standstill since the suspension of the Internet.

The Impact on the Economy

The internet blackout has had a significant adverse impact on the IT industry. The ability to carry out day-to-day operations for IT companies depends wholly on internet connectivity. Companies that provide digital services rely on websites and social media platforms to deliver their products and services. With the internet blackout, they cannot complete their orders, causing delays and loss of revenue. The industry leaders called upon the Prime Minister to restore the services, stating that the impact on the economy is quantifiable, but the inconvenience to people is incalculable.

The long-term impact of the outage

The internet outage in Pakistan has raised concerns among industry experts about the long-term impact on the economy. Pakistan earned $2 billion in IT exports during 2022, a hard currency source for a country struggling to meet its foreign exchange needs. When overseas buyers experience disruptions in internet connectivity in Pakistan, they shy away from engaging with IT service companies in the future. Such disruptions even cause breaches of running contracts with overseas buyers of IT services. The suspension of mobile broadband services has not only affected the revenue of digital service providers and the government but has also had a ripple effect on the overall economy of Pakistan.

Impact on Freelancers and Startups

Freelancers, who work independently and depend on the Internet to perform their jobs, are also unable to access their work, communicate with their clients and submit their assignments on time, adversely impacting their income and credibility in the market. Moreover, local technology startups are increasingly important in promoting entrepreneurship. Pakistani tech startups attracted more than $300 million in investments in 2022. Internet disruptions impact tech startups badly. The suspension of mobile broadband services has disrupted the workflow of freelancers and startups alike.

Industry Leaders’ Reaction

The IT industry has condemned the blanket blockage of internet services in the country, calling it mindless and consultation-less. The Chairman of the Pakistan Software Houses Association (P@SHA), Muhammad Zohaib Khan, lambasted the government’s decision to suspend internet services in the country. He stated, “The internet is our lifeline, our office, our communications infrastructure, and the IT industry can’t operate without it.”

The Ex-CEO of Jazz, Aamir Ibrahim, tweeted, “Shutting down the internet is not a solution to anything; it creates more problems than it solves.” He demanded the immediate resumption of internet services to the IT industry, stating that “the devastating effect on the economy is quantifiable, but the inconvenience to people is incalculable.”

Conclusion

The internet suspension in Pakistan has caused significant financial losses to digital service providers, the government, and the general population. It has adversely impacted the IT industry, the economy, freelancers, and startups. The industry leaders have called upon the Prime Minister to intervene directly and advise the Pakistan Telecommunications Authority (PTA) to resume internet services without wasting time. The immediate resumption of Internet services is necessary to avoid any long-term impact on the country’s economy.

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