By Anthony Mitchell
July 25 - 31, 2005




If there was ever a time for a country to reposition itself, now is Pakistan's time. We begin here by outlining actions that can be taken to boost the economy and business confidence, then turn to what Pakistan might do to improve its image as a safe country in which to work and invest.

The economic damage caused by recent malfunctions with the SMW3 submarine cable was aggravated by government telecommunications policies. Those policies are still in place.

This has been a bad couple week for your country, Pakistan. Every day brings more bad news. The worst indication is the drop in confidence among broad segments of the business community in Pakistan earlier this month, particularly the tech sector, which has been growing at over 50 percent per year and represents one of your strongest bases of support.

Whereas the world as a whole has been transfixed by the London bombings, recent telecommunication problems that cut most of Pakistan off from the outside world for more than 11 days have caused widespread economic damage.

Although press coverage had previously revealed the fragility of Pakistan's telecommunications links, most businesses in Pakistan were caught unprepared. Last minute rerouting belatedly averted additional maintenance outages that were set to begin on Pakistani Internet and voice traffic traversing through Europe.


Your government has been moving to privatize the government-owned Pakistan State Oil (PSO), Oil & Gas Development Corporation (OGDC), and other government or state-owned firms. Privatization is not synonymous with economic liberalization, as we see in the telecom sector. Regulations stemming from another era that drive all international telecommunications traffic through PTCL are still in place.

If there had been full telecommunications liberalization before the recent outage, then individual firms would not have been blocked by the government from quickly arranging for communications backup links independent of PTCL. While the government did a commendable job of providing free satellite backup links to commercial call centers during the outage, other sectors of the economy that are not stand-alone international call centers suffered considerable damage.


In addition to allowing independent international connections, Pakistan needs to lift restrictions on the use of technologies that are well established elsewhere in the world. The first thing that can be done is to lift the limit on digital subscriber line (DSL) speeds from the current 2-Mb cap.

Second and more important is the question of lifting restrictions on the use of voice over Internet protocol (VoIP) for making telephone calls over the Internet. Those restrictions were originally instituted to drive all telephone traffic through PTCL.

In speaking with overseas Pakistanis about changes they would like to see in Pakistan, lifting restrictions on VoIP outranks everything else. The ban on VoIP is a hidden tax that makes Pakistan less competitive internationally. At a time when all major international corporations are integrating their global operations through VoIP, a ban on VoIP is a high price to pay for protecting PTCL.

When governments pick technological winners and losers, everyone loses. Pakistan can be on the cutting edge of the deployment of new technologies. Fully deregulating telecommunications is a good first step in that direction.

To its credit, it should be noted that your IT Ministry recently succeeded in arranging for the construction of two separate high-speed telecommunications links. One new link will go through India and tap into their international telecommunications backbone, while another will be a submarine cable to a hub in France, with connections to the U.S. and UK. Along with recently expanded satellite links, Pakistan by the end of this year will have excess high-speed capacity and triple redundancy that will make it a reliable location for mission critical IT operations and a hot spot for IT outsourcing.




Your government has been encouraging local investors to venture into the international call center arena. However, the future of customer service is not with pure-play call centers. Pakistan arrived five years behind India in this.

"News about international terrorist attacks and their ties to Pakistan are detrimental to the image of Pakistan as a safe place to conduct business," said Omar Khan, head of mobile phone software firm NetPace in Silicon Valley. Omar added, "The government needs to do a lot more to eradicate extremist elements from the country -- our future depends on that."

Although it is widely recognized within Pakistan that your country is the strongest ally that the U.S. has in its fight against terror, and that more Pakistanis have been killed on the U.S. side than people from any other nation, your government has done little to highlight its efforts in this regard. Consequently, Pakistan's role goes largely unrecognized internationally.

Also unrecognized is how safe it is to travel and work in Pakistan, and how welcoming Pakistanis are to Americans from all walks of life. There would be more Americans who could help get that message across if your government were to remove the one-month limit on duration of stay for most business visas and if it were to help make visa renewals a less arduous process.


"The recent problems with connectivity have wreaked havoc with a number of companies operating here but we are already seeing positive benefits emerge from the experience," said Ayub Khan at InfiniLogic. "There is a renewed sense of urgency amongst both industry and government about developing a robust infrastructure and eradicating the mountains of red-tape that have previously stifled small business," he said.

Ayub notes that IT companies in Pakistan are now talking openly and frankly with each other and with your government about:

How to develop a common strategy for the IT industry.
How to improve quality.
How to improve the image of the IT industry.

Last Saturday morning; Ayub participated in a meeting with managers from 10 other international IT companies in Karachi. He reported that every person attending the meeting was not just focused on his or her individual problems, but on not "letting the side down."

Most of those firms have managers who grew up in the U.S. or Europe, obtained their education and initial work experience there, and fully understand the quality of service that must be maintained in order to compete effectively in global markets. Ayub said, "It is this group who will lead the next wave of growth in South Asia."



(This on-line article was carried by E-Commerce Times on July 19 and reproduced here on the desire of the author)