EDITORIAL: IT Minister Aminul Haque would have noticed, when he met telecom industry executives divided over the launch of 5G network services, that their most consistent complaint was inconsistency in government policies for the sector.
Now, while China Mobile-owned Zong is willing to “fully cooperate” with the ministry for the 5G rollout next year, Jazz, Telenor and Ufone are wondering how they will do it when the industry’s “very survival is at stake”.
The whole sector, which is supposed to be the backbone of the modern digital economy, is suffering because of a severe cost-push financial squeeze and an administration unable to figure out its policy direction.
That’s why it’s demanding urgent policy interventions, including denominating spectrum payments in rupees instead of dollars and extending its payment terms to 10 years from five, suspension of annual payments to Universal Service Fund (USF) and Ignite for two years, and reduction of withholding tax on essential telecom services to eight percent from 15pc.
But since the minister was already aware of these demands, and all he said in his meetings to address them was that the government was doing all it could, he didn’t exactly inspire the kind of confidence that was needed to get the ball rolling on the 5G front.
There’s much talk at the top level about growing the IT industry into a leading export earner. Yet even though the minister admitted that “improvement in connectivity was linked to the telecom sector, and I am convinced that the economic stability of the country was linked with a strong and vibrant telecom industry,” there’s not much happening on ground in quantifiable terms to back this realisation. And the whole IT sector is waiting for the telecom sector to be able to meet Pakistan’s digital inclusion objectives.
Even if/when the government is able to put enough on the table for the telecom sector to play along, there will be a lot of issues to address before the whole thing can really take off. Recent floods badly damaged and degraded telecom infrastructure up and down the country.
Rising interest rates are therefore not only worsening the financial crunch and cutting crucial investment, they’re also making reconstruction a lot more expensive. And then there’s increasing electricity prices and the falling rupee to add to input costs. That’s a lot to do, especially when you haven’t made up your mind how you’ll do it and the clock is ticking.
IT is one of the most important ministries in most countries in this day and age. We need only see across the border in India to understand how prudent planning and provisioning can indeed turn it into an export powerhouse. In addition to powering the economy, it also forces an improvement in the quality of education to feed a rapidly growing industry. Here, priorities are different and the IT ministry was doled out to a disgruntled ally to prevent undue embarrassment so soon after the no-confidence motion brought the present coalition government to power.
Industry executives also enlightened the IT minister that frequent changes in government policy were making it difficult for them to convince their investors to continue investing here. There are, in fact, rumours that one of the three companies that expressed their reservations to the minister might be considering wrapping up from Pakistan altogether.
Given these circumstances, it would have been much better to have a more IT-oriented man heading the ministry. Yet effective policy can still be framed by taking all relevant stakeholders on board at the right time and devoting enough resources to overcome immediate hurdles.
Managing this “digital emergency”, as one industry executive put it in the meeting with the minister, is the least the government is expected to do. At stake is not just the fate of a few countries or the 5G network or even the whole sector, but Pakistan’s chance of being able to function as a proper digital economy in the 21st century.
Copyright Business Recorder, 2022
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