The costs of limited connectivity – Economy

The costs of limited connectivity – Economy

A wise man learns from the mistakes of others, while a fool learns only by making the same mistakes himself. Or so the Urdu proverb goes.

But there are also many who never learn, like the people who rule Pakistan and who delight in repeating the same series of self-destruction without ever understanding the consequences.

In case you were wondering, I was talking about Pakistan’s repeated adventures with the Internet. Even a decade after this obsession first began on a large scale, those in power are as serious as ever about repeating the same mistakes, only bigger and better this time. Whether it’s willful ignorance, brash arrogance or just plain old incompetence, nobody knows.

What we do know is that the authorities – whoever is in charge – have been throttling connectivity for over a year now, right around that fateful day whose name we won’t mention here. Everyone has experienced it: at home, in the office or on the way to work. And it doesn’t matter whether you rely on fixed or mobile broadband.

There was already a long list of sites that Big Brother had flagged for us over a decade ago. But to make sure life went 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 voice them. Imagine the horror.

In fiscal 2023, data accounted for nearly two-thirds of mobile revenue, a daily average of Rs 151 crore.

Next up seems to be WhatsApp, where users are repeatedly having problems sending or receiving media files such as voice notes or images over mobile data.

Ignore for a moment all the boring stuff like “digital rights,” as it will inevitably be sidelined anyway, and focus on the hard numbers. Pakistan has made great strides in expanding internet access, with broadband penetration exceeding 57.05 percent in fiscal year 2024, compared to 32.55 percent in fiscal year 2019. However, of the 138.3 million connections, more than 97 percent are mobile.

This majority is also the first and biggest victim, as a significant part of the government’s efforts to control the Internet are directed at mobile phones. Think of the Bykea driver who uses WhatsApp to send voice messages, or any illiterate worker for whom WhatsApp is the best communication platform.

The good news is that the overlords have finally noticed that something is wrong. Last week, the Senate Standing Committee on Information Technology held a hearing on the matter and asked the two regulatory stakeholders, i.e. the Telecommunications Authority and the Ministry of Technology, for answers. Allegedly, this slowdown could be due to the government installing a firewall or updating its “web management system”.

Apparently, this is a routine measure being taken to protect the country’s cybersecurity interests. Even if we take the claim at face value, it has been more than a year now – I think someone should talk to their technology partners and commend them for the agility in implementing this.

It is clear that such measures have far-reaching consequences. First of all, we have a struggling telecoms sector where one multinational has already exited the market while others are struggling to increase their average revenue per user. Data and the services built on it are their best chance of offering their foreign sponsors meaningful growth in dollar terms.

Not surprisingly, throttling and/or blocking mobile broadband has a major impact on telecom companies’ revenues. In FY2023, data accounted for nearly two-thirds of mobile revenues, a daily average of Rs 151 crore, roughly equivalent to the loss the industry has to bear when authorities tinker with the internet.

According to Cloudflare, download speeds in Pakistan were only 22.3 Mbps, behind Nigeria (26 Mbps), Indonesia (31.5 Mbps) and the Philippines (97.4 Mbps). In such an environment, telecom companies need to invest more in upgrading their technology and infrastructure. But it seems that the government has little left after deducting 35 percent in taxes and even more in throttling and shutting down the internet.

It is hard enough to create optimism about the “brand Pakistan”. Various industry associations, from the leading foreign investors’ chamber of commerce and industry to the association of software houses, have warned of the dire consequences. Sure, some may be exaggerating, but the loss of confidence has become far too obvious to ignore.

We have known for decades that relying on the government for anything is pointless. Power? Get a backup generator or UPS. Water? Call the tanker mafia. Education? Empty your pockets and send your kids to a 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

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