Current Status and Future of the IT and Telecom Sector in Pakistan

1
Current Status and Future of the IT and Telecom
Sector in Pakistan

• M. Tariq Badsha
• Member (IT)
• Ministry of Information Technology
• Government of Pakistan
• Dec 19, 2009

2
Outline

• Background
• Start-up Phase
• Consolidation Phase
• Sustainability and Scalability
• Challenges and the Future

3
Background

• IT Division Formed in 2000 - consolidating IT
  Telecom functions under M/o Science Technology
• IT Policy Approved by the Cabinet in August 2000
• Mandate of the IT Division
• IT Sector Development and use of IT for better
  government services
• Telecom Sector Development
• IT Ministry formed in 2002

4
Start-up Phase(Inception to 2002)

• Recruitment of IT and Telecom Professionals
• Setting up Organizations
• Electronic Government Directorate (2002)
• Higher Education Commission (2002)
• Strengthening of Pakistan Software Export Board
• Virtual University
• Creating an Enabling Environment
• Pilot projects of a wide variety
• Major thrust on HR and Infrastructure Development

5
Start-up Phase(PSDP allocations)
6
Achievements and Lessons

• Achievements
• Breaking the inertia
• Building the team
• Creating Basic Organizations
• Developing the Telecom Infrastructure
• Testing the waters in various sectors
• Long lead activities (HR) put in motion
• Key policies and Legislation
• Lessons
• Bring Focus
• Strengthen Implementation

7
Consolidation Phase(2003-2007)

• With the formation of HEC a significant part of
  the HR program was shifted to HEC
• Program was focused on
• Citizen Services
• IT for improving efficiency as a means to support
  Services
• IT industry Development - increasing exports
  and/or creating local employment
• Infrastructure to meet specific needs
• Targeted HR Development
• Telecom Sector Deregulation and Privatization
• Legislation and Enabling Environment

8
IT Industry Development
Activities/Major Functions

• Advisory and Information services
• Infrastructure Support (STPs)
• Exhibitions and Events
• Industrial Automation
• Quality Certifications
• Corporate Training Programs
• IT Industry Internship Programs
• Open Source Resource Center (www.osrc.org.pk)
• Facilitate resolution of Industrys Operational
  Issues

9
E-Government Strategy

• Basic Infrastructure
• Hardware, LAN at Ministries, Centralized Data
  Centre
• Common Applications
• E-Office comprises of Common processes (IC, HR,
  PM, Budget, Inventory)
• Agency Specific Applications
• Example Hajj Applications. Online registration
  of companies with SECP, Online recruitment at
  FPSC, Online Access to case laws, Court
  Automation, etc
• E-Services
• Domicile, Driving Licenses, International Driving
  Permits, Arms License Issuance, Food, Agriculture
  Livestock Information Repository (FALIR), Land
  Record Revenue MIS etc
• Replication and Reuse
• Replication of E-Office applications to 45
  Divisions

10
HR Development

• National ICT Scholarship Program (RD Company)
• Opportunities for students from remote areas to
  study in ten top universities of the country
• Internships (PSEB)
• Match making between fresh IT graduates and IT
  companies by placing IT graduates in IT
  companies
• IT Apprenticeship Program (RD Company)
• Rs. 15,000 per student per month to groom young
  professionals
• Corporate Training Program (PSEB)
• A program that brings in trainers from abroad to
  train and subsequently certify individuals
  nominated by their companies
• Capacity Building Programs (PSEB)
• Specialized Training for local IT companies in
  and  General Training in the field of project
  management, network/security systems and business
  process modeling
• Federal Govt. Employees Training Program
  (Computer Bureau)
• Training in basic IT to Federal Govt employees
  working in various Ministries/Divisions
• Virtual University with enrollment of over 50,000

11
Telecom Sector

• Governing Legislation
• Pakistan Telecommunication (Re-Organization) Act
  1996 (Amended 2006)
• Sector Policies
• De-Regulation Policy for the Telecommunication
  Sector 2003
• Mobile Cellular Policy 2004
• Broadband Policy 2004
• Universal Service Fund Policy 2006
• Formation of Companies to manage USF and RD
  Funds

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National ICT RD Fund Company

• Independent Company .
• Activities funded by mandatory contribution from
  Telecom Operators
• Goals
• Cultivate industry-academia partnership
• Enhance the national ICT related human resource
  development capacity
• Make Pakistan an attractive destination for high
  tech jobs
• Use ICT as a tool for wealth creation 
• Spread the ICT activities at the National level.

13
National ICT RD Fund Company

• Major Programs
• National ICT Scholarship Program
• IT Apprenticeship Program
• Technical RD Projects
• International Publications

14
National ICT RD Fund - Projects
Category Proposals Amount(Rs. Mil)
1 VLSI Design 6 104
2 4G Wireless Development 2 30
3 e-Health and e-Education 5 71
5 Social Networks 2 21
6 Mobile Device Software Systems 7 86
7 Network Security/Multimedia and P2P Systems 9 108
8 Open Source Development 7 135
9 University Excellence Program 1 16
10 Human Resource Development 7 121
11 Conferences 4 2
15
Universal Service Fund Company

• Independent Company
• Contributions by Licensed Telecom Service
  Providers
• No Government Funding
• Spent by Telecom Service Providers to provide
  services in un-served and under-served areas
• Ministry acts like a Trustee of the Fund
• Disbursed through open competitive bidding by USF
  Company (bidder requiring least subsidy wins)

16
Universal Service Fund

• Currently has three programs
• Rural Telecom and e-Services
• Fiber backbone
• Broadband

17
Universal Service Fund
26 Lots of Rural Telecom
18
Optic Fiber availability in Pak.
Universal Service Fund
No Province Tehsils without Fiber In Percent
1 Punjab 05 04
2 Sindh 18 19
3 N.W.F.P 16 31
4 Baluchistan 42 64
5 FATA 32 76
Total 125 31
19
Universal Service Fund
Broadband status in Pakistan
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Score Card IT industry Development

• Exports- SBP From US 23 million in 2002-03 to
  US 184 million in 2008-09
• IT Parks 700,000 sq feet.
• Land earmarked at Karachi, Islamabad, and Lahore
  for purpose-built technology parks
• ISO 90012000 certification to 100 IT companies
• 24 companies certified in CCM/CMMI levels 2 to 5

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Score Card e-Government

• Basic IT infrastructure at all Ministries
• Electronic File Movement and MIS (Common
  Applications) implemented at the Ministry of IT
• Over 30 agency specific applications developed
  for Health sector, Municipal services
  Recruitment, Law enforcement, District Courts,
  and federal government Ministries
• Federal Government Data Center being established
• Maintains Government of Pakistan Web Portal

22
Score Card - HRD

• 600 apprentices through IT Apprenticeship program
• Over 1,500 rural/non-metropolitan area students
  currently studying, through National ICT
  Scholarship Program
• Training of 5,000 Government Servants in IT
• Distance learning education to over 50,000
  students through VU
• Internships- 4460 graduates from 220
  universities/institutes placed in 250 IT
  companies

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Score Card - Telecom
Parameters Current Stats
Fixed lines (teledensity) 3.526 Million (2.2)
Mobile lines (teledensity) 95.918 Million (58.6)
WLL lines (teledensity) 2.716 Million (1.6)
Total lines 102.16 Million
Combined teledensity 62.4
FDI (2008 09) US 815 Million
Total Direct Induced Jobs in Telecom Sector 1.36 Million
Telecom sector Revenue (2007 08) Rs. 278.459 Billion
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Telecom Score Card (Cont..)
Parameters Current Stats
Total Internet Connections 3.7 Million
Total Internet Users 17 Million
Total Broadband Subscribers 350,000
Cellular Mobile Operators (No.) 06
Long Distance International (LDI) (No.) 12
Local Loop (Region wise) Operators (LL) (No.) 72
No. of under sea cables International bandwidth 3
Domestic Fiber Backbone Networks 4
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Telecom Score Card (Cont..)
Broadband Subscribers by Technology
S. No. Technology Dec 08 Mar 09 Jun 09 Jul 09 Aug 09 Sep 09
1 DSL       171,170       176,616       262,661   265,275   272,862   298,887
2 HFC         40,330         40,330         36,201     37,334     36,759     36,004
3 WiMax         39,310         39,310         88,477   101,956   119,718   133,538
4 FTTH           2,370           2,370           3,967      4,353      4,495      4,092
5 EvDO         14,000         14,000         22,503     25,191     26,662     27,474
6 Others       22 803 797
Total Total 267,180 272,626 413,809 434,131 461,299 500,792
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Sustainability and Scaling Up2008 onwards

• Update of policies
• USF and ICT RD Fund Companies gaining full
  momentum
• Impact analysis of completed IT Projects
• Scaling up successful pilots
• e-office at M/o IT replicated to all Federal
  Ministries
• Federal Government Data Center
• Adjusting policies and regulatory environment in
  light of changed telecom environment to maintain
  sector growth.

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Challenges e-Government

• Acceptance of IT enabled processes by government
  functionaries (cliché Culture Change)
• Ownership of IT projects and resources for
  sustainability
• HR for operations
• Recurring expenditure
• Electric power and other infrastructure
• Security of Networks
• Hiring and retention of IT Professionals in
  government

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Challenges IT Industry

• High Quality HR to feed the industry technical
  as well as middle management
• Affordable IT-enabled space
• Country Perception
• Increased global competition
• Attrition of HR to lucrative markets
• Venture Capital and Financing
• Exploiting niche markets

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Challenges Telecom Sector

• Sector health in light of
• higher saturation levels
• lower ARPU due to price wars
• Shrinking margins
• Introducing value-added services
• Optimal Frequency management
• Management versus speed of processing
• Flexibility in terms and conditions of licenses
• distribution (Defence, Public Sector, and
  Commercial)

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Challenges Telecom Sector

• Maintaining Investors Interest
• Legislation and Policies to deal with possible
  mergers and acquisitions to maintain a fair
  competitive regime
• Using ICT infrastructure for Socio-economic
  development
• Increasing Broadband penetration Supply side as
  well as demand (consumer appetite)
• Convergence of media, telecom, and VAS

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Challenges ICT for Development

• Cost of Access devices
• Broadband service charges have come down
  significantly but still above the price point for
  mass acceptance
• Content for Broadband services
• Mindset of service providers
• Literacy and Capacity for absorbing technology
• Basic services (electrification, roads, drinking
  water, etc.)

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Future

• Telecom Policies are being revised in
  consultation with all the stakeholders to address
  the challenges of the current market dynamics.
• Similarly, the IT Policy of 2000, is being
  updated. Targets would have to be set for
  government ministries
• New legislation in the areas of Data Protection,
  Privacy, Consumer Protection, IPR
• IT must be introduced in our SME sector more
  aggressively if they are to remain competitive
• IT companies would have to scale up partly
  through organic growth but mostly through mergers

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Future

• Work on affordable solutions
• Using FOSS technologies where applicable
• Lightweight software for extending the life of
  hardware
• Localization
• Public access points like telecenters
• Generate viable business models for small
  entrepreneurs around ICT

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