Businesses paralysed, freelancers out of work: how internet outages hit ‘tech destination’

KARACHI/ISLAMABAD: The government’s apparent ‘trial and error’ method, which involves installing a firewall to protect itself from cyberattacks, has ended up hurting the country’s IT industry, say experts.

Pakistanis have been dealing with the slow internet for the past few weeks, with the government silent over the sporadic internet outages. According to the Wireless and Internet Service Providers Association of Pakistan (WISPAP), over the past few weeks, internet speeds have plummeted by 30 to 40 percent. Faisal Farooq, chief operating officer of software firm AlphaRages Pvt Ltd, says the disruptions caused by the recurring internet outages not only result in direct financial losses but also disrupt operations, damage productivity and erode customer trust. “As a business leader, I believe it is imperative to advocate for a more reliable and resilient internet infrastructure. This requires a concerted effort from both the government and the private sector to invest in robust network infrastructure, improve redundancy and enhance cybersecurity measures,” he added.

Wardah Noor, CEO at xWave, an online learning platform, says the users have been facing disruptions on various social media platforms for the past two weeks. “People were unable to view videos and photos on Facebook and WhatsApp, which is why we bore losses on our advertisements since most people couldn’t see them and the desired leads could not be generated.” She adds that xWave had planned to start a tech course from August 14, for which some 1,500 people had registered. However, on that day, many students expressed concerns over the internet issues. Around 300 students were able to join the live session, but there were many disruptions and most of them complained about bad audio quality. “Our labs on the country’s outskirts are also facing internet outages, making it difficult for our teachers to take online sessions.”

Invents Global CEO Amar Makhdoom calls it the ‘wrong timing for the internet slowdown’. He says the unrest in Bangladesh had provided opportunities for the Pakistani market. “With Bangladesh closed for business, this was a good opportunity to double down and get the lion’s share of $5 billion-plus annual IT services export market...There has been a sudden rush of business towards Pakistan, and the companies are not able to deliver on time.”

The industry leaders have expressed both frustration and sorrow over these outages. Chairman P@SHA Zohaib Khan says the internet disruptions “are a great loss and have created a negative impact on the Digital Pakistan brand.” In a statement released on Thursday, Senior Vice Chairman of P@SHA Ali Ihsan said, “These disruptions could inflict devastating financial losses estimated to reach $300 million.”

Sources in the e-commerce industry, who agreed to comment on the condition of anonymity, say, “When it comes to the e-commerce industry like ours, internet MBs are like heartbeats. If the heart stops beating, everything suffers. From our sellers, partners, internal warehouses and fleet management services, call centres to our customers, everyone faces delays and lags due to the interrupted coverage. As a result, the overall business and user experience is severely impacted without any recovery.”

For travel agents, internet disruptions have brought another set of challenges. Hammad Haleem, owner of a Rahim Yar Khan-based travel company, said, “It is becoming increasingly difficult to lock the fares shown at a given time. As soon as we book it, there is a lag in connection and the transaction does not go through. When the system is refreshed, we have missed out on locking the relatively low fare shown earlier.” He said the authorities must prioritise the development of a resilient internet ecosystem that can support the growth and competitiveness of Pakistan’s businesses.

Muhammad Umair Siddiqui, VP of Enterprise Services at Mazik Global, a software house, also fears that such disruptions could undo the year-long work that the government and IT bodies have done to make Pakistan a global tech destination. He said the entire supply chain could be disrupted because of IT issues at any given point, leading to delays in business operations. “The companies outsourcing assignments to Pakistani firms may not be end customers. If they are acting as the middle person and if they face delay in meeting their deadlines, the entire business operations are affected. Offshore resources have gained a lot of prominence in the post-Covid world, and the industry survives on trust. Such disruptions lead to trust deficit, which is a loss for the entire nation.”

According to Umair, IT bodies and other institutions have made a lot of investments to project Pakistan as a good offshore destination on the global stage. He added that companies and individuals also invest in equipping themselves with tech skills required by international clients. But stories like this will demotivate people looking towards learning IT skills. It also hurts the image of Pakistan as a tech destination, pushing investors away who may have thought of parking their investment in the Pakistani market.”

Web3 & digital asset consultant Arsalan Khan shared how these disruptions have paralyzed the workforce: “Our design team in Karachi is unable to meet deadlines and deliver work because the internet is giving problems. We are given examples of China where ‘social media’ is contained. Yes, they blocked Google, Facebook, etc, but in return, they had WeChat and other applications. So, the idea was to have social media but regulate it accordingly, unlike here where authorities have taken away social media and the internet altogether. I think the most promising industry that grew in the last couple of years with this dwindling economy was the IT sector, and steps like this will only damage it beyond repair. All our foreign colleagues are shy of asking us for work, as they sympathize with us. However, they are now taking the same economic opportunity that we could have elsewhere.”

Officials from the Pakistan Telecommunication Authority (PTA) did not respond to The News request for comment. Different associations and trade bodies have been quick to highlight the long-lasting impact of an unstable internet. In a tweet posted on X (formerly Twitter) on August 15, the Overseas Investors Chamber of Commerce & Industry (OICCI) said that the “recurring internet curbs exacerbate the challenges faced by the services sector and erode investor confidence. With Pakistan already struggling to attract FDI, these actions risk further isolating the country from the global digital economy.”

The Karachi Chamber of Commerce & Industry (KCCI) said it had received multiple complaints about slow internet speeds from different companies. Reacting to this situation, digital rights activist and director of Bolo Bhi Usama Khilji says, “Even though the government is saying that it is working hard to increase IT exports and they’re creating a Nawaz Sharif IT city, internet services in the country are not functioning normally. Even basic services like WhatsApp, which is used for safe communication, are barely working; only text messages are going through. This shows how contradictory their positions are.

“We’ve already seen how freelancing platforms such as Fiverr are suspending Pakistani freelancers’ accounts because they say Pakistan is facing disruptions and there is trouble for freelancers here to deliver their work on time. So, it’s just showing that the IT industry, which was the only industry that was doing really well in a struggling economy in Pakistan, is now also doing badly because of what the government is doing. They are saying they are putting up a firewall in the country for security, but they are actually doing it for censoring more content and this is a suicidal policy by the PMLN government. This is going to have bad consequences for the economy and the future of Pakistan. We’re seeing more than 1.6 million people leaving the country annually, and steps like this will lead to a higher exodus of young talented and skilled workers,” he adds.

Meanwhile, amid an outcry from internet users and digital rights activists over the disruption of digital platforms and internet slowdown, the authorities have completed the second trial run of the much-debated firewall, telecom sources told Geo News on Thursday. The firewall was installed on the internet service providers (ISPs) possessing deep packet inspection (DPI) capability, the sources said, adding that it had been installed given national security concerns.

Telcom sources also confirmed that the mobile signals and internet services had slowed down due to the installation of a new firewall aimed at blocking unwanted content. They claimed that all social media services would normalize in two to three days after the conclusion of the firewall’s trial period. The first trial run was said to have been carried out in July which resulted in the slowdown of social media platforms. The federal government had allocated more than Rs30 billion in the development budget for the acquisition and installation of this filtering system. The allocation was made to the Ministry of Information Technology; however, the execution of this project is being done from another power centre.

The adverse impacts after installing the firewall drew criticism from local netizens and digital rights organisations who expressed fear about the future of internet-based businesses in Pakistan. The internet disruption is not only affecting the citizens’ rights but also causing financial losses to the national exchequer, as several online businesses, including e-commerce and ride-hailing services, are bearing the brunt of the restricted connectivity.

In a related development, the Senate Standing Committee on Information Technology and Telecommunication (IT&T) Thursday asked the government to ascertain the exact reasons for the slowdown of internet services countrywide and come up with an official reply. The Pakistan Telecommunication Authority (PTA) is making its assessment and will come up with its findings in two weeks. The committee met at the ministry’s office with Senator Palwasha Zai Khan in the chair. Senator Humayun Mohammad and Senator Afnan took up the issue of the internet slowdown causing disruptions in services and significantly impacting e-commerce. They said the slowdown had caused massive losses to e-commerce and freelancing.

Senator Afnan Ullah said the country was already facing an enormous economic crisis, and if the internet issue was not resolved, the country might lose its $3 billion in IT sector exports. Secretary IT&T Aisha Humera Chaudhry explained that there was no issue with the broadband connections; however, the mobile operators using the mobile data were facing disruptions. She informed the committee that the PTA was assessing the issue and the ministry would be in a better position to provide an overview once the assessment was completed in two weeks. Additionally, the committee addressed the complaint of MNA Ali Jaan Mazari against the poor internet service in Kashmore. Mazari said the internet services had been crawling for the last four months, and despite several requests, no action had been taken so far.

The PTA officials told the committee that there were around 156 sites of three major service providers in the area and that the internet services were mostly down due to the unannounced loadshedding. However, they said the PTA was assessing the issue and will submit its report in the next 15 days. The committee also directed the PTA to submit its quarterly survey report in the next meeting.

Senator Afnan Ullah Khan raised the issue of appointing the IT secretary from the private sector and said it was rumoured that the secretary would be appointed for two years with a salary of around Rs2,000,000.

Shaza said the proposal was forwarded by the Establishment Division and that the ministry will brief the committee on the matter in the upcoming week. The committee deliberated on the Bill titled “The Personal Data Protection Bill, 2023.” Senator Dr. Afnan Ullah Khan, the bill’s mover, stated that the primary purpose of the bill was to protect the data of citizens because, as of now, there was no law in place for this purpose.

The IT&T Ministry officials informed the committee that the ministry had consulted over 100 local and international stakeholders and was working on the final draft to address the grievances of stakeholders. The draft will be completed in the next 15 days. Considering the importance of the bill for the country, the committee recommended that the ministry complete the draft as soon as possible. Later talking to reporters, Minister for IT Shaza Fatima said they had received complaints about the internet slowdown, which should not have happened. She said the government was making efforts to launch 5G services.