GSMA warns Pakistan likely to lag in digital race without urgent reforms

ISLAMABAD: The GSMA has issued a strong warning that Pakistan risks falling behind regional peers in the digital race unless urgent telecom policy reforms are enacted—amid stalled 5G rollout, 52 per cent mobile internet usage gap, and crushing taxes of up to 40 per cent on smartphones.

The caution came during the GSMA’s Digital Nation Summit 2025, where government and telecom leaders gathered in Islamabad to discuss Pakistan’s digital future.

At the heart of the summit was the launch of the GSMA’s new flagship report: “Unlocking Pakistan’s Digital Potential: Reform, Trust and Opportunity.” The report provides a detailed roadmap to narrow Pakistan’s digital divide and unlock economic growth by addressing key policy bottlenecks such as unsustainable spectrum pricing, excessive taxation, regulatory uncertainty, and barriers to mobile internet usage.

Julian Gorman, Head of Asia Pacific at GSMA, highlighted that despite 81 per cent mobile broadband coverage and 68 per cent smartphone ownership, only 29 per cent of Pakistanis used mobile internet in 2024, leaving the country with a 52 per cent usage gap—the highest in the region.

“Pakistan has the talent, ambition and vision to be a digital powerhouse, but policy barriers are holding it back,” said Gorman. “Reform is no longer optional – it is essential for economic growth, social inclusion, and global competitiveness.”

Key challenges highlighted by GSMA included the following:

Stalled 5G Rollout: Pakistan lags behind Asia-Pacific nations in 5G deployment; delays in spectrum auction threaten industrial growth and real-time services.

Spectrum Scarcity and Pricing: Pakistan has one of the region’s lowest IMT spectrum allocations. Spectrum cost-to-revenue ratios in the region have tripled in the last decade; Pakistan’s high prices may affect coverage and service quality.

Heavy Taxation: Combined taxes on mobile usage reach 33 per cent, among the highest in the region, while smartphones face up to 40 per cent in customs duties and taxes—discouraging digital access.

Low Usage Despite Coverage: Half of Pakistan’s population lives under mobile broadband coverage but does not use it, due to affordability, low digital literacy, and trust deficits.

Slowed IT Export Growth: P@SHA Chairman Sajjad Syed warned of an exodus of IT firms and freelancers amid sluggish export growth, power shortages, and inconsistent digital infrastructure.

Meanwhile, Federal Minister for IT and Telecom Shaza Fatima Khawaja reaffirmed the government’s resolve to shape a resilient and inclusive digital ecosystem under Prime Minister Shehbaz Sharif’s vision. She cited:A 14 per cent improvement in the ITU ICT Development Index. Over 200 million telecom subscribers and 10 million new broadband users.

Copyright Business Recorder, 2025