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IT AND Telcom Sector - Catalyst for Economic Growth of  
Pakistan  
Muhammad Imran Ali 

 
The monopoly in Pakistan's telecom industry ended in the year 2002 and the economic indicators showed positive signs within three years. Analysts believe that high Foreign Direct Investment (FDI) and economic pace are outcomes of brilliant policies by Government of Pakistan and also deregulation of telecom sector. Future of Pakistan's telecom sector seems very exciting but the good old past should also be kept in mind for learning and formulating fruitful future strategies. The foundation of this boom was led by the government and the private sector acted swiftly in the right direction towards the voyage of a wired Pakistan. The country is moving with a very high pace towards a tele-dense country. It is praiseworthy to notice special interest of Ministry of IT and strong support from Government of Pakistan to make the industry more competitive and beneficial for both consumers and telecom companies.

Internet usage is also being promoted widely in the country and more real world services are now shifting to Internet day by day. Government has established about 50 IT centers for awareness in villages and 800 centers are to be established before the end of 2006. Establishment of Virtual University for distance learning is also a futuristic move as centers of this university have also been set up all over the country which are interconnected via broadband. Besides this, 200 acres land for Internet City in Karachi has also been allocated.

Pakistan is heading towards automation as government departments and ministries have started adopting computerized systems for processing of different everyday jobs. An E-government department with the name of 'Electronic Government Directorate (EGD)' is also there to facilitate automation. This department aims to make all government departments online; all ministries now have their websites online. The government has also set a target to train 16,000 employees for computer use in coming months. IT Parks in metropolitan cities like Islamabad, Lahore and Karachi serve as platforms for buying and selling of IT services. All this is not only helping in the promotion of IT in an effective manner but is also contributing towards the economic growth of Pakistan.

The telecom sector remained the hottest of all in last 2 years and is still playing a key role in the country's economic growth. From Europe to Middle East, investment inflow is coming up while the days pass by. This is not just because of the telecom operators that came to Pakistan but also because of vendors which provide the basic infrastructure, technical support and equipment etc. for telecom companies. We can see this sector is acting as a catalyst for future economic development as the share of telecom industry in provision of employment and development in rural sector is on the rise.

The country which had only 1500 Internet subscribers in 1995 now has the figure in millions. Currently, over 1900 cities and towns have Internet access in Pakistan. Similarly, last year the tele-density graph rose to such a high level that it had touched 13.7% which was at that time 3% higher than India despite of the fact that India ended the telecom monopoly before Pakistan. Currently, the tele-density has touched the 17% mark and is increasing rapidly.

If we look into the revenue collection by the telecom sector, it has contributed over Rs. 45 billion to national exchequer. This contribution comprises 17% of total public sector development program. On the other hand, revenue and tax collection through import and sales of millions of cell-phones across the country has also contributed towards improvement in revenues for the government.

So the journey from monopolistic era to this competition age has proved to be fruitful in all aspects. Foreign investment, job creation, revenue growth and economic activities, everything showed positive signs. The role of PTA, Ministry of IT and government should be appreciated in taking all the right steps at the right time which resulted into an investor friendly and consumer focused industry. This growth will continue at a higher pace and will further create jobs and revenue opportunities as the tele-density is still around 17%, it can go above 80% likewise in other developed countries.

The IT and telecom industry thus played the leading role in driving Pakistan's economy to such a great level. Many heads of International organizations appreciated the investor friendly policies and highly suitable business environment of the country. This means we will see more investment in coming years. Pakistan is on the 'take off' position in terms of economic growth and excellence in the field of IT and telecommunications. One can expect further Development and Growth in this sector and great Economic activities in the future.

The writer is an IT and Telecom industry analyst. He can be reached at imran@itinsight.info

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