By Adil Mir
It is that time of the year again where I take you on a journey of how the IT & Telecom industry performed during the year. Unlike last year, 2014 was quiet an eventful year for both sectors where we have seen an immense growth in e-commerce popularity along with IT start-ups like mushroom growth. This year the Telecom sector was equally popular and for all the right reasons.
First up, I would like to share few statistical data about the IT industry. Pakistan Software Export Board has updated the statistics and they are now claiming Pakistan’s export share to be USD 2.8 billion in 2014. I would not debate the value which they have claimed as it is always a pride to see the growth in IT sector. It was also seen that start-ups have taken a leap frog and there has been over 200% growth recorded in new start-ups coming up in 2014. Additionally, this year also marked significant success internationally where developers and start-ups won top awards and recognition globally.
On the policy front, Ministry of IT (MoIT), Pakistan Electronic Media Regulatory Authority (PEMRA) and Pakistan Telecommunication Authority have floated a draft of new policies to Telecom & IT industry for creating a mutually beneficial policy document. Although Youtube remains blocked throughout 2014 as well but with this policy there is a hope of its revival in 2015. The major success of MoIT & PTA came through (finally) auctioning of 3G & 4G spectrum licenses to mobile service operators. This generated revenue of over USD 1.0 billion for Government of Pakistan. This is also our first sector in review this year.
Globally 3G mobile internet service has been in place for a few years now and Pakistan was one of the few countries left where this service was yet to see the daylight. Finally, 2014 was the year where the entire nation found a reason to cherish after auction and subsequent launch of mobile broadband services by all but one mobile operator. Zong was the only operator with both 3G & 4G spectrums and Warid pulled a cheeky one by not buying the spectrum license and utilizing an already vacant spectrum. Although Mobilink, Ufone, Zong are one way or the other claiming reaching 1.0 million subscribers but little that general public knows that it is a figure for people using “free” 3G services. Telenor on the other hand is focusing on expanding its reach and is adding cities rapidly. Warid is testing its 4G LTE service in Lahore, Karachi & Islamabad but there have been reports of patchy and unreliable service. What I don’t understand is that except for Telenor, not even a single company is promoting what 3G or 4G will be used for. Until and unless they have applications and services available which take advantage of mobile broadband, this will remain a service on which subscribers will be watching Youtube or Dailymotion like services. Over the Top (OTT) based services, which includes but not limited to Video, calling over WiFi and localized Skype like services. On the other hand, creating localized app stores will also jump the uptake and revenues for telcos as the subscriber can pay monthly subscription and company can save on Internet bandwidth.
Moving on to the IT sector, 2014 was the year where we saw massive growth in new start-ups working their way up to the applications & services development scene. In recent Asia Pacific ICT Awards (APICTA) held in Jakarta, Indonesia, and Pakistani companies bagged 5 awards (2 Gold & 3 Silver). This is an achievement from 2013 where Pakistani software houses only managed to bag 4 silver medals. This year around the quality and quantity of software houses was definitely a notch above last year. P@sha has always been the advocate of promoting software houses and developers in Pakistan and in 2014 P@sha went a step ahead and aggressively supported them internationally as well. The Government of Pakistan must take notice of the efforts and extend its full support to P@sha along with the credit which is long due. PSEB, a Government answer to “support” likes to visit international exhibitions and boast numbers but it is P@sha which is making it possible for all software houses and IT services companies to unite on a single platform.
Talking about software houses, we must appreciate the rising trend of venture capitalist firms investing into Pakistani software houses for growing their businesses globally. This is a welcome trend which will enable domestic talent to stop worrying about the operational costs and focus on delivering world class products. Last year we reviewed Eyedeus Lab, a start-up by young graduates from LUMS. This year Eyedeus Lab secured a six figure funding, through support & facilitation of Plan9 (Start-up incubator), P@sha& Google Pakistan. Pakwheels.com, a veteran site for car enthusiasts and brain child of Hanif Bhatti, and later acquired by Confiz Solutions, has managed to raise USD 3.5 million investment from Frontier Digital Ventures, a Malaysian based venture capitalist firm. This investment is primarily for improving ads placement and revenue from Pakwheels.com
Venture capitalists are not the only ones interested in Pakistani IT sector but also companies like Rocket Internet, OLX & Line Messenger are also expanded their global presence into Pakistan in 2014. Rocket Internet, a Germany based Internet Company which creates online businesses according to the regions requirement. The company already established its roots through the launch of Daraz.pk and now operates over 30 websites in Pakistan. The most prominent ones are Carmudi.pk, Asani.pk & Kaymu.pk. Rocket Internet also launched “Easy Taxi” in Pakistan which enables the user download the app on their iOS or Android device and call in a taxi service using the app.
OLX had already started a buzz in 2013 with their “baich de” (sell it) campaign slogan and they formally started hiring staff for Pakistan. Now with localized advertising and targeted audience, OLX is making the full use of Internet growth in Pakistan. The focus of the company at the moment is to capture as much visitors as possible and they are willing to invest into this market to bear fruits later.
Line Messenger, a global instant messenger & chat application also made its debut in the Pakistani market in 2014. Although we have yet to see a wider uptake and replacement of the position which Whatsapp holds but we also know that it only takes a fad to change application usage loyalties. Whatsapp & Skype usage has already put a significant dent in the Telco’s revenues where SMS is pretty much replaced with Whatsapp messages.
Overall 2014 was the year IT & Telecom sector were waiting for as it has kick started the much awaited re-launch of both sectors. However, there are a few recommendations I would like to share with both sectors, which I believe should work in the best interest of businesses and end-users alike. First for the Telecom sector; all companies should now start focusing their efforts on how they will leverage mobile broadband services. I am sure they are already working on it but there are few services which can really make a difference in people’s lives. For starters, there has been a security issue for everyone for the last over a decade therefore mobile SIM based security and surveillance cameras and solutions should be introduced. These solutions can be tailored for consumers and corporate separately with different classes of services. Additionally, similar solution can be offered to law enforcement agencies where all activities of personnel are monitored. This will not only improve their efficiency but will also give citizens a piece of mind. All data must be backed up on a central third party servers with limited access to top brass of law enforcement agencies only. Second, they should work on partnering with Google, Bing or even Pakistani Naseeb Networks for providing mobile maps applications with real time data from local servers. This service can also translate into location based services. Media and content streaming services will surely kick off the uptake, especially if customers can access them on the go. There are many more applications for obtaining best out of the 3G/4G services but that would take a lot more space and time.
For IT industry, they should watch out for the bubble. I am sure that it will take some time for businesses to grow but then again, until and unless we have a world class quality products to offer, which can attract global masses, it will only start declining. Moreover, companies should start working towards providing localized alternative to services which CISCO, MS, Oracle or other services providers. There is still a huge gap of localized applications which can be filled through creating apps for domestic market as well. Since now every second mobile being sold is a smart phone therefore uptake will not be a problem. IT & Telco sectors can work hand in hand in creating newer applications and solutions, which will suit Pakistani market.
–The writer is an IT and telecom professional with over a decade of experience in national and multinational companies. He is also a tech enthusiast and freelance blogger. He can be followed @NerdEinstein.
