Information and Telecommunications Journey in Pakistan: Future Directions Presentation by Dr. Manzoor Ahmad, Honorary President (PRIME) and Chairman, Pakistan LNG Ltd

Six Phases 1947–1965: Few telephone connections 1960’s-80’s: Second generation mainframe computers limited to a few public companies and institutions 1990-2003: Import restrictions removed, taxes lowered; start up of internet services 2004-2008: Deregulation of telecom services; opening up of the cellular mobile services; new Broadband Policy 2009-2013: Decline in Foreign Direct Investment; Establishment of International Clearing House (ICH) 2014-Present: Introduction of 3G/4G; rise in teledensity and broadband penetration

Fourth Phase - Starting 2003/04 Deregulation of telecom services Telecom becoming the fastest growing sector Tele-density jumped from 6% to over 58% (2003-08)

Fourth Phase: (Contd) Cellular phones users increased from 2.4 million to 89.6 million (2003-08) Coverage of telecom services extended to over half the population

Fourth Phase: (Contd) Telecom sector’s contribution to GDP increased from almost negligible to over 3% per year (2007)

Fifth Phase: 2008-2013 FDI declining, lowest at US$ 813 million in 2011-12

Fifth Phase: 2008-2013 International incoming traffic began falling Revenue loss est. $4 b

Sixth Phase: 2014-present Introduction of 3G/4G Cellular subscribers increase from 120 million to 142million (2012-17)

Sixth Phase: 2014-present Broadband subscribers increased to 49 million 3G/4G Teledensity rose from 7.1% to 21.6% in (2014-17)

Internet Penetration Remains Low Pakistan’s 22% penetration low against Asian average of 46.7% Low compared to Bangladesh (44.5%) and India (34.4%)

High Taxes Serving as a Major Barrier Mobile operators paying US$ 1.2 billion in taxes each year, about 30% of total revenues Survey shows that 31.6% of a mobile’s cost is taxes – third highest level of taxation (18.1% average) Far higher compared to Iran (6.20%), India (10.35%), Sri Lanka (12.26%), Malaysia (15.95%) and Bangladesh (20.21%)

The Way Forward More emphasis on ICT infrastructure development Rationalization and reduction of taxes on ICT goods and services Adoption of forward-looking regulatory and legal framework Ensuring predictability and continuity in government’s policies Improving computer literacy rates - introduction at all educational levels Close the digital divide between urban and rural areas E-government should be strengthened, with land records and tax administration fully computerized. ICT should be introduced in all sectors including health, education and agriculture Ensure affordable access to equipment and ICT services Capitalize on the opportunities arising from CPEC and become a hub for ICT services More collaboration between the provinces to ensure best practices are replicated Facilitate bringing in digital payments such as PayPal