‘IT industry demonstrates growth of -3.02pc owing to decline in telecommunication’ – Business & Finance
ISLAMABAD: The information and communication industry demonstrated growth of -3.02 per cent because of a decline in telecommunication (Spectrum fee was down by Rs75 billion in fiscal year 2024 compared to fiscal year 2023), the Economic Survey 2023-24 noted.
The survey further noted that the IT industry in Pakistan currently generates an annual export of around $2.6 billion. However, to achieve the ambitious target of yearly exports of $15 billion in the next five years, adding at least 200,000 proficient and specialised IT professionals is necessary.
The industry holds substantial investment potential, with local investments of $6.3 billion and FDI (Inflow) of $1.4 billion from 2019 to March 2024.
Despite economic challenges such as higher business costs and inflationary pressures in fiscal year 2024 (July-March), the telecom sector showed resilience, expanding its services and generating telecom revenues of Rs735 billion (estimated).
During fiscal year 2023, the telecom sector remained a significant source of revenue generation, with Rs340 billion in GST, withholding tax, regulatory fees, initial and annual licence fees, and other taxes. During fiscal year 2024 (July-March), the telecom sector also contributed Rs213 billion.
ICT export remittances have surged from $339 million (17.44 per cent) to $2.283 billion during fiscal year 2024 (July-March) compared to $1.944 billion during the same period last year. In March 2024, ICT services export remittances surged to $306 million, an increase of 36 per cent compared to $225 million in March 2023.
Compared to the previous month of February 2024, ICT services export remittances increased by $49 million (19.1 per cent growth) in March 2024. The trade surplus of $1.996 billion, the highest in all services (87.43 per cent of total ICT export remittances), has been realised by the IT and ITeS Industry during the fiscal year 2024 (July-March), an increase of 15.84 per cent as compared to a trade surplus of $1.723 billion during the same period last year.
At the same time, the services sector has recorded a trade deficit of $1.655 billion during FY2024 (July-March). ICT sector exports of $2.283 billion are the highest among all services (39.31 per cent of the total export of services), with “Other Business Services” trailing at US$ 1.205 billion fromFY2024 (July to March).
Pakistan-based freelancers contributed foreign exchange earnings to Pakistan’s economy through remittances of $350.15 million during fiscal year 2024 (July-March).
The survey noted that recent developments, such as expanding broadband services, flexible pricing regulations for telecom operators amidst rising inflation, and the declining multi-SIM phenomenon, have led to a noteworthy increase in ARPU. In the fiscal year 2024 (Jul-Dec), ARPU reached Rs284/month compared to Rs248/month in the fiscal year 2023.
Pakistan offers its citizens some of the world’s lowest and most budget-friendly telecom prices. The one GB of data cost in Pakistan is a mere $0.12, making it the lowest in the region and sixth lowest globally.
An analysis of the effective price of one GB of data over the years reveals a consistently declining trend, with data costs per GB registering a 71 per cent decline since FY2018, decreasing from Rs114.6/GB to Rs32.8/GB during fiscal year 2023.
Broadband subscriptions surged to 130.5 per cent, increasing from 58.7 million in FY2018 to 135.4 million as of Mar 2024.
These statistics emphasise the growing significance of broadband services in Pakistan’s digitally connected society. Data usage in the telecom sector has seen a significant increase; the combined data consumption from both mobile and fixed broadband services in FY2024 amounted to a substantial 24,515 petabytes (estimated), emphasising the pivotal role of broadband in Pakistan’s digitally connected society and the need for infrastructure expansion.
Copyright Business Recorder, 2024
