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One of the world’s largest digital societies already

Since the turn of the new millennium Pakistan has revolutionized itself by way of digital communications. The Growth of telecom and media sectors (about 100 local TV channels and 150 radio stations by start-2019) meet a rapidly growing young population (more than 51%, or over 100m of the country’s 207m people are under the age of 25). Demographics and technology have resulted in a digital realm that is bigger in numbers than the individual national size of over two-thirds of the countries on the planet and makes Pakistan one of the largest digital societies of the world. In 2017 Google put Pakistan among the four countries (along with India, Indonesia and Brazil) that will give the ‘next billion smartphone users to the world.’ At the start of 2019 Pakistan accounts for 153m cellular phone subscribers (a teledensity of over 73%) of which 63m have broadband Internet connections and 61m are 3G/4G subscribers,

An expanding digital footprint for Pakistan means large numbers of people are connected and millions of new citizens are being added to the numbers of mobile, Internet and social media users every year. Information consumption online is increasing. As a result, in recent years dedicated online platforms catering to news and current affairs have increased dramatically apart from most mainstream media groups establishing and expanding their online operations and helping expand freedom of expression, access to information and media diversity and pluralism. Most media groups and their broadcast or publications, such as dailies Dawn, Jang and Nawa-i-Waqt and television channels such as Geo, ARY and Dunya have online platforms that command large traffic of online news consumers. Social media platforms such as Facebook, YouTube, Twitter and Instagram have tens of millions of users in Pakistan and are rapidly altering the online information and citizen journalism landscape, like everywhere in the world. The government actively promotes a culture of information sharing through Right to Information (RTI) laws at the federal level and in the four provinces, which mandate all public bodies in Pakistan (including ministries, corporations and other line offices) to maintain official websites and proactively disclose 39 categories of information online.

According to the State Bank of Pakistan (SBP), over 10m online shopping transactions worth about PKR 60 billion (USD 461m) took place in the last fiscal year 2017-18. The size is expected to cross the billion-dollar annual mark by 2020. Such has been the growth of online shopping in Pakistan that Alibaba, the Chinese e-commerce behemoth valued at more than $500 billion, purchased Daraz, Pakistan’s largest online retailer in May 2018 for around $500 million. In 2016, Daraz became the first Pakistani online retailer to rake up PKR 1 billion in single day sales, while one year later in 2017, its Black Friday single-day sale had tripled (PKR 3 billion). It now takes orders from several South Asian countries. However further growth seems inhibited by restrictive regulation of digital payment such as PayPal. Revisions of this framework have already been devised and approved by the SBP but were yet to be notified by start of 2019. An overhaul of the e-commerce policy framework for changing online merchant spaces in Pakistan is currently underway and could pave the way for more competition and credible international players to also enter the burgeoning e-commerce market.

A key national telecom player in Pakistan is the national space agency SUPARCO, which operates indigenous satellites impacting media digitalization and improved distribution for greater numbers of media channels. In 2018, Pakistan set in motion a flurry of initiatives that aim at nudging the country into an expansive technological endeavor and catapulting its space program into the global big league. In its latest national budget in 2018, the government enhanced Suparco funding by a third to $41 million. This includes money for three new initiatives — an $11.7 million multi-mission satellite (PakSat-MM1); an $ 8.7 million program to establish space centers in Karachi, Lahore and Islamabad; a $1.7 million Space Application Research Centre in Karachi; a $7.2 million multi-purpose Pakistan remote sensing satellite that will be launched in 2018; and the testing and operationalization of a four-stage indigenous SLV [space launch vehicle]. Pakistan has already completed three of the four stages of its SLV, making it one of only a few countries with such an advanced stage of their space programs. The Pak-Sat-MM1 satellite mainly aims to expand Pakistan’s communications broadband footprint further and promote the Direct-to-Home (DTH) television[v] infrastructure in the country. Besides increasing the availability of much larger bouquets of TV channels to audiences and complete digitalization of broadcast media, this will also facilitate more accurate tracking of broadcast media consumption indicators, which will help both audiences and advertisers.

International players dominate Pakistani Internet, telecom and mobile markets

The Internet, fixed line and mobile telecommunication markets in Pakistan are mostly dominated by foreign players. There are four cellular telecom service providers in the country – all international, including the Norway-based Telenor, Egypt-based Mobilink, the UAE-based Ufone and the China-based Zong – that also double up as the country’s largest Internet providers by traffic. All are licensed by the Pakistan Telecommunications Authority (PTA) with major offices in Pakistan and coverage over large swathes of the country. The less relevant fixed-line service is provided by mostly local ISPs in Pakistan, offering bouquets of high-speed Internet, phone and TV services. Key players include Nayatel, Cybernet, Wi-Tribe, Qubee, Nexlinx and Pak Datacom.

At start of 2019, the largest player was Jazz (Pakistan Mobile Communications Ltd, PMCL) with 36.7% of the market with 56.1m subscribers, followed by Telenor with 28.3% with 43.3m subscribers, Zong (China Mobile Pakistan) with 20.9% with 31.9m subscribers and Ufone (Pak Telecom Mobile Ltd) with 13.9% with 21.3m subscribers. In 2014, four 3G licenses were awarded to Jazz, Telenor, Ufone and Zong while Zong was also given the license of 4G service. In 2016 also Telenor received the 4G license and Jazz in 2017. The strong international footprint in the sector ensures good standard, virtually uninterrupted mobile telecom services allowing for the spurt in media consumption on the go among millions strengthening the demand side for information and a proliferation of specially formatted information templates that allow for mobile-friendly interfaces of news and current affairs websites consolidating the supply side of media. 

The only national telecom operator is Special Communications Organization (SCO), a public sector entity operated by the Pakistan Army through the Federal Ministry of Information Technology and Telecom. It’s operational footprint for provision of cellular and Internet services is limited to the northern territories of the country including Azad Jammu and Kashmir (AJK) and Gilgit-Baltistan (GB) with a combined population of over 5m. In 2018 SCO started testing for provision of 3G and 4G. The AJK and GB regions are considered politically and militarily sensitive being on the border with Indian-administered part of Kashmir. Over a million Indian and Pakistani soldiers are stationed in both the respective parts of the disputed territory of Kashmir. Other international telecom players are not allowed to offer services in AJK and GB locally.

On the supply side, international players again dominate the Pakistani online space, such as Google in web-search. In terms of social media, Facebook is by far the largest player in Pakistan at 87.96% - in early 2019 - followed by Twitter at 4.73%,Pinterest at 2.59%, YouTube at 2.05% and Instagram at 2%. Local social media platforms are all but absent. None of these international players, though, are involved in production of news media content. Samsung and Huawei are the largest players in the mobile devices market.

Proactive official support for an advanced technology culture

The Pakistan government is proactive on technology policies and there exists the Federal Ministry of Information Technology and Telecom, which operates a liberal technology regime that seeks to promote the IT sector in the private domain. It regulates the operations of international telecom and mobile Internet providers, through the Pakistan Telecom Authority (PTA)

Pakistan government announced the country’s first ever ‘Pakistan Digital Policy’ in 2017 seeking to make Pakistan “a strategic enabler for an accelerated digitization ecosystem to expand the knowledge-based economy and spur socioeconomic growth. With this vision the digital policy has set the goals including holistic digital strategy with ICT as a broad enabler of socioeconomic development, promote the use of technology in education, health, agriculture and other key socioeconomic sectors.” The goals also include strengthening Pakistan's ICT ranking based on international indices and benchmarks. The government also plans to develop zones for IT start-ups and software technology parks in major cities, promote R&D, entrepreneurship and innovation and promote e-governance and make the country a frontrunner in good governance through ICTs.

Pakistan not only supports growing reliance on technology but has also recently been budgeting special programs to advance technological excellence. To augment its space and allied science programs, Pakistan in 2018 launched four major centers of excellence in cutting-edge technologies. The first was the National Centre of Artificial Intelligence, which is part of a three-year national AI program. The second was the National Centre of Robotics and Automation, built as a consortium of 12 technology universities and 45 advanced learning labs, grouping together more than 200 PhD scientists and technologists. The third was the National Centre for Cyber Security, and the fourth was the National Centre of Big Data and Cloud Computing.

These institutions have been formed with the mission of accelerating technological development through scaling up the availability of the scientific community to advance the national space and allied science programs. Media players in Pakistan have been taking advantage of the rapid developmental strides in the IT and have recently started embracing initiatives aimed at improving their shift to integrated digital journalism programs, which has had the salutary effect of improving the scale of diversity and pluralism in the online spaces which is not reflected in the offline media due to a host of censorship issues curbs on freedom of expression.

Collaborations between tech companies and media and government authorities

With over 35m Facebook and more than 3.5m Twitter users in Pakistan in 2018, in a backdrop of increasing censorship in recent years, these two social media platforms have increasingly become news sources themselves through citizen journalism. Some of the most popular social media persons in Pakistan are journalists some of whom command millions in followership. Mainstream media organizations also maintain social media accounts that have millions of followers of their own. However, there is no formal collaboration on journalism between tech companies and media although there have been, for various periods of time, collaborations between TV channels and mobile telephony players like Telenor and Jazz on cheap data packages to access live TV on mobile. This was in the pre-3G stage in 2013. Since then widespread availability of 3G/4G has made direct TV access on mobile and other devices like tablets easier and widespread at no extra cost.

In the run up to the July 2018 general elections in Pakistan, Facebook launched a program to help voters identify their constituencies and make sure their votes were registered. This was done through a formal collaboration between the social media giant and the Election Commission of Pakistan (ECP) through which Facebook users were notified to ensure their votes were registered through a pop up in their news feed. Additionally, ahead of the elections, Facebook announced it was taking steps to (i) reduce chances of fake news, (ii) prevent abuse and hate speech on the platform, (iii) train ECP to increase transparency promote civic engagement, and (iv) improve enforcement of its ads policies and greater ads and page transparency.

A growth trajectory for the tech economy

Pakistan’s IT industry has demonstrated positive growth trends since 2013. During fiscal year 2016-17, Pakistan’s IT exports were USD 3.3 billion, which have climbed to USD 5 billion and are expected to grow to USD 10 billion by 2020. Enterprise software has grown by 17%, marketing tech 15%, financial services 13%, consumer goods 9%, retail/e-commerce 8%, professional services 8%, Internet of things/hardware 7%, healthcare 4%, media 4% and non-profit 3%. A positive growth trajectory is expected in the start-up world, which the government is aggressively promoting. It has given 3-year exemption from taxes to the start-ups and set up national incubation centers in Lahore, Islamabad, Peshawar, Karachi and Quetta. The Pakistan Software Export Board (PSEB) in partnership with National ICT R&D Fund (IGNITE) has placed over 1,700 IT graduates as interns in various IT companies and banks and more than 60 percent of interns had a job offer from their respective companies. The government has also approved the ‘DigiSkills’ program to provide training to one million youth to streamline excellence in technology, innovation, and professionalism.

At the close of Pakistan’s fiscal year 2017-18 (June 31, 2018), the telecom market revenue in Pakistan for the last four fiscal years was USD 15.35 billion. For the fiscal year 2016-17 it was PKR 464.11 billion (about USD 3.43 billion). Between 2012 and 2017, except for one year in 2015, the revenues have shown steady increase going from PKR 439.52 billion to PKR 464.11 billion. This was one of the best performing economic sectors in Pakistan for the duration. Foreign investments in Pakistan’s telecom sector during the last five years (2022-17) was USD 4.77 billion although the investment inflow for the last two years has been tapering off.

Conflicting regulatory regime

Pakistan does not require registration of websites and there is no specific regulatory regime for online content. This has allowed an explosion of native websites focusing on media and current affairs that include not only online versions of offline media but also dedicated and popular online-only media content platforms such as Humsub and Sujag. The Pakistan Telecom Authority (PTA), however, exercises jurisdiction in online spaces and operates a policy to ban content or website that is deemed either blasphemous or pornographic under the law. In 2017-18 alone, PTA blocked a staggering 800,000 websites and web pages that had “inappropriate and objectionable content.” These statistics were given by PTA to the Senate Standing Committee on IT & Telecom in late 2018. All actions were taken under the Prevention of Electronic Crimes Act (PECA) of 2016.The blocked sites, pages and video channels contained, according to PTA, “anti-state, anti-judiciary, blasphemous, defamatory, pornographic, proxy or sectarian/hate speech” and the objectionable content was mostly found on Facebook, Twitter, Dailymotion and YouTube, among others. PTA has an agreement in place with Facebook to block pages/content allegedly violative of PECA law while it also has been in talks with Google, Twitter and YouTube for similar arrangements. PTA takes in requests from the public to block content through its email address –

On the positive side, since 2014, Pakistan’s start-up ecosystem has made significant strides thanks to supporting networks such as tech hubs, educational institutions, mobile operators and investors playing an active role in growing local start-ups. According to the GSMA Ecosystem Accelerator program’s tech hub landscaping research, Pakistan saw a 30 per cent growth in the number of active tech hubs between 2016 (26 tech hubs) and 2018 (36 tech hubs), positioning itself as the largest tech ecosystem in South Asia after India. Most of these organizations are spread around Pakistan’s three biggest cities and tech centers – Islamabad, Karachi and Lahore. Software developers are often the driving force behind a tech ecosystem. Pakistan alone is home to 360,000 software developers with over 10,000 IT graduates reaching the market each year. The country is also the world’s third largest supplier of expertise on the leading contractor platform

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