In an insightful discussion with Julian Gorman, Head of Asia Pacific at GSMA, we explored the pressing challenges faced by Pakistan on its path to becoming a Digital Nation. Our conversation delves into critical aspects of the telecom industry, the complexities surrounding internet usage, and the forthcoming 5G spectrum auction. Julian drives collaborative efforts between the mobile industry, policymakers, and ecosystems to advance digital economies. With 20+ years of global experience in Wholesale, Business, Regulatory, Policy, and Digital Transformation, he’s a pioneer in forging digital partnerships and units.
Following are the edited excerpts of the conversation BR Research had with him:
BR Research: How does the GSMA view Pakistan’s telecom industry and digital infrastructure? How can we improve on the gaps?
Julian Gorman: The GSMA recognizes Pakistan’s telecom industry as a sector with significant potential for growth. The industry has made notable strides, such as the transition from 2G to 3G and efforts to modernise its infrastructure, which have been commendable. However, there are challenges that need to be addressed to fully realise this potential. A key issue is the lack of a stable, long-term vision, which has impeded sustainable development. To support the continued growth of the telecom industry and Pakistan’s broader digital ambitions, it is crucial to establish and implement a consistent and enduring strategic plan.
Additionally, addressing policy inconsistencies and the heavy taxation burden on local telecom operators is essential. The current financial landscape, where Pakistan has one of the lowest Average Revenue Per User (ARPU) rates globally - below $1 compared to the global average of $7 - poses significant challenges. Furthermore, spectrum payments in USD, juxtaposed with returns in PKR, create financial strains that hinder ongoing investments in digital infrastructure.
To bridge these gaps, it is imperative for local governments to engage in meaningful dialogue with industry stakeholders. By drawing on regional trends and best practices, Pakistan can develop a policy framework that fosters an environment conducive to sustainable digital growth.
BRR: Do you think Pakistan is ready for 5G?
JG: 5G is not just a step from one generation of technology to another; it represents a transformative leap that requires substantial groundwork. It is inappropriate to simply calibrate readiness by the schedule to make spectrum available which nevertheless remains uncertain. A comprehensive plan which unites government, industry and ecosystem with a common vision and commitment is critical.
To fully realise the benefits of 5G, Pakistan must first develop a vibrant and sustainable ecosystem capable of investment and innovation to develop and solve use cases. The industry must also have the capacity to invest in the infrastructure to support services and transformation opportunity of 5G.
It’s important to recognise that spectrum allocation is just one part of the equation. True progress will come from sustained investment in infrastructure, which will yield long-term benefits for the economy and the digital landscape. For Pakistan to successfully embrace 5G, it must focus on creating a robust foundation that will enable the technology to thrive.
BRR: How is the recently launched report ‘Realising Pakistan’s Aspiration to Become a Digital Nation’ facilitating local government to make informed decisions?
JG: The GSMA’s report underscores the necessity of a ‘Whole-of-government’ approach, emphasizing five critical pillars - infrastructure, innovation, data governance, security, and people - as the foundation for a strong digital nation.
Also, the report highlights Pakistan’s significant progress in mobile connectivity, with 81% of the adult population now covered by 3G or 4G networks and smartphone ownership at 63%. However, only 23% of the population subscribes to mobile internet services, illustrating the challenge ahead. To address this, the report provides actionable recommendations, including financial reforms like eliminating high taxes on mobile services and introducing a smartphone financing policy as well as a rational approach to spectrum pricing ahead of the 5G spectrum auction, crucial for sustaining long-term digital growth.
These insights are designed to guide local governments in creating policies that foster a connected, inclusive, sustainable and prosperous digital future for Pakistan.
BRR: How have the recent heavy taxation impacted the telecom landscape and what potential losses do you envision as a result?
JG: The recent heavy taxation has placed an additional burden on local telecom operators, who were already grappling with revenue challenges. This financial strain risks slowing the growth of digital infrastructure, which is vital for Pakistan’s digital future.
Digitisation and economic growth are deeply interconnected. High taxes can discourage investment, limit market potential, and reduce accessibility and competition. For Pakistan to unlock its full digital potential, it is crucial to create a more supportive fiscal environment that encourages sustained investment in the telecom sector.
BRR: Pakistan’s youth bulge is an asset; however, the lack of digitization and accessibility makes it a challenge for youth to progress, where do you think the government can play a role in enabling a healthy digital ecosystem for youth to flourish?
JG: Access to connectivity has been instrumental in positioning Pakistan as a leading freelance market in the region. However, inadequate infrastructure and significant mobile usage gaps have hindered the full realisation of this potential. Network shutdowns have also undermined the credibility of Pakistan to continue to grow its IT services exports.
To harness the talents of its youth, the government must priorities not only accessibility but also affordability and reliability. Ensuring affordable internet access and widespread smartphone availability will empower Pakistan’s youth to engage more actively in the global digital economy and unlock new opportunities across various fields.