IT exporters are growing worried after Pakistan Telecommunication Company Ltd (PTCL) announced that slow speeds will persist as repair work on the damaged submarine cable is facing delays. In November 2024, Pakistan’s service exports grew by a respectable 6.5 percent because of the IT sector.
Before the internet slowdown, service exports rose consistently by over 7.5 percent to reach $3.27 billion in the first five months of FY 2024-25. However, connectivity issues may jeopardise the growth of Pakistan’s rapidly growing service sector. PTCL has confirmed that it will take several days to get internet services back in order but that the internet will remain available for use in a limited capacity.
Experts are predicting that these internet connectivity issues could significantly hamper the growth of future IT exports. The reason cited by experts is that foreigners could soon notice how unreliable internet services are once their projects face delays due to connectivity issues.
Pakistani businesses working on outsourced tasks are expected to suffer tremendously as they may lose out on foreign contracts because of unreliable internet connection. A potential reason behind the loss of contracts is that prolonged connectivity issues can erode the trust of clients in the ability of Pakistani businesses.
The freelancing community is another segment of the population that will be struck hard by the slowdown in internet speeds. According to Dawn, Pakistan ranked second in terms of the number of freelancers in the world last year, exporting services to 170 countries.
For Islamabad, this is a huge setback as this could significantly hamper project Uraan Pakistan and Shahbaz Sharif’s plan to boost IT exports in the recent past. The government has set an export target of $25 billion in the next five years, which translates to five billion dollars per year. This is significantly higher than the 3.223 billion dollars it currently generates from IT exports.
If this situation continues, Islamabad may soon witness a decline in the future foreign reserve inflows, which it desperately needs.
Aside from exporters and the government, businesses will also be hit hard because of the abysmal internet speeds. The non-IT export businesses that will suffer the most include those that offer streaming services such as Urduflix and Vodlix.
While Islamabad reiterates its commitment to achieve 25 billion dollars in exports in the next five years, experts are predicting that it might not be possible with the frequent fluctuations in internet speeds that occur either as a result of cable faults or to curb political protests.