Thursday, August 27, 2009

The federal government has so far failed to appoint any suitable minister for IT and Telecom

Pin It LAHORE: The federal government has so far failed to appoint any suitable minister for IT and Telecom - one of the most important sectors of economy.

The telecom sector has been the major driver of economic growth for the last five years and has contributed over Rs300 billion to the national exchequer from 2005-06 to 2007-08. Various operators have invested over $8.8 billion in telecom infrastructure during the same period.

Foreign Direct Investment (FDI) in telecommunications stood at around $5.6 billion, which on average was over 30 per cent of the total FDI between fiscal year 2005-06 and 2007-08.

The telecom operators say that on the one hand the government has a huge army of ministers looking after every small department and at the same time it has failed to assign the duty of IT and telecommunications to any one.

A senior official of a cell phone company said the IT and telecom sector has already been facing the heat in the recent economic recession. Margins have already evaporated and high inflation has reduced gross spending on communications. Instead of facilitating foreign investors through policy decisions, the government has worsened the situation through high taxes.

He pointed out that the telecommunication policy was developed when the telecom sector was de-regularised to facilitate new operators. The policy has lived past its five-year term but work has not been initiated for the next policy.

Major policy decisions necessary for the sector’s growth have been delayed for months due to the absence of the sector’s representation in policymaking bodies like the cabinet. Even petty matters that demand government’s intervention take months for resolution, he added.

Similarly, Adnan Bin Riaz, a software house owner developing software for export only, said in this age of information technology strong telecommunication system was the backbone of entire national development and growth.

He was of the view that the global village concept that has been emerged during the last decade has only been materialized once the traditional barriers in trade and economics have been shattered by the modern communication systems.

He further said besides this strong telecommunication system is the backbone of national defense system which has been providing connectivity to all the strategic national institutions but in the absence of sector representative in government creates many hurdles in taking small decisions.

The telecom sector experts said the foreign investors were facing a lot of problems due to lack of ownership at the government level and a lot of crisis have already started raising heads in this sector due to the step motherly attitude of the government. The industry has witnessed one of the highest workforce layoffs in recent days where in some of the countries have reduced there workforce by up to 50 per cent. The cellular mobile operators, LDI’s and PSTN service providers all in sheer frustration are looking for avenues to pull their investments from Pakistan. They feared that if the foreign investments would be started fly out from Pakistan then the situation would be very difficult for the foreign investment in the country. They pointed out that it was time that government must discontinue its lay back approach and appoint a strong minister to safeguard the sector interests in national policy making. The declining profitability and customer base across the board in the telecommunication sector is a clear indicator that the sector is on the verge of a major crisis. The sector demands immediate government attention for the safeguard of all the stakeholders through major policy initiatives, which will not be possible in the total absence of ownership at the top level.

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