Unprecedented Boom in Pakistan's Technology Sector

[Riaz Haq]

Pakistan's technology sector is in the midst of an unprecedented boom. It is being fueled by the country's growing human capital and rising investments in technology startups. A recent tweet by Swedish fund manager Mattias Martinsson captured it well when he wrote, "Have followed Pakistan for 15 years. Can't recall any time time when VC activity was anywhere near we've seen in the last few months. Impact of reforms kicking in?".  New laws have made it easier to create startups and offered greater protection to investors.  Digital infrastructure has expanded with over 100 million smartphones and an equal number of broadband subscriptions. 

Source: Twitter

Pakistan is churning out more than 30,000 information technology graduates every year. Over three-quarters of Pakistanis in the top three metros of Karachi, Lahore and Islamabad are regularly using the internet. Technology startups are on track to attract more than $230 million in venture capital investments this year, almost 5 times greater than vc investments last year. Technology exports are increasing by double digits every year, reaching $2.1 billion in the fiscal year that ended in June 2021.  Pakistani freelancers' revenue grew 47% last year, the highest growth in Asia and the fourth highest in the world. 

Over Half of All Pakistanis Are Connected to the Internet. Source: Google-Kantar

Pakistan has seen a phenomenal growth of 3500% in broadband subscriptions over the last 8 years . Pakistanis now own more than 103 million smartphones with mobile broadband subscriptions. In a Youtube presentation of the report, Faraz Azhar, Industry Head, Performance, South Asia Frontier Markets, Google said: “With half of its population on the internet - Pakistan is now online!"  

Pakistan's Middle Class Growth Among World's Fastest

Google Search and YouTube are the most popular Internet applications in Pakistan, according to the study. YouTube is used by nearly 90% of all internet users in Pakistan for streaming music and watching video/TV, and 38% of Pakistan's internet users go to YouTube in the research phase of their shopping journey. 

Pakistan has also experienced an e-commerce boom in the midst of the COVID pandemic. 71% of Pakistani shoppers find purchasing products or services online easy, while 66% find it convenient. Another 54%  find that online shopping websites or apps give personalized product recommendations, which answer common questions. Two-thirds of consumers believe that online shopping is the way forward. They say they will continue to buy products or services online after the COVID-19 pandemic.    

Faraz Azhar, Industry Head, Performance, South Asia Frontier Markets, Google said: “With half of its population on the internet - Pakistan is now online! This is the first time Google and Kantar released a study to understand more about Pakistan’s internet population. But it’s not only about people getting online, this research has uncovered new insights and behaviors that show how COVID is impacting online behaviour and the digital opportunities waiting to be unlocked.” 

Global Investors of Pakistani Startups. Source: Google-Kantar

"More people are coming online in Pakistan, creating a great opportunity for eCommerce businesses - if they are ready to seize it. As we see more exploration of the internet beyond social, e-retailers can capture natural cross-category purchasing on its rise, but only if they have first established themselves and their product offering in an online marketplace," he said.

Pakistan Startup Funding. Source: Google-Kantar

With expanding Internet infrastructure and rapidly growing user base, Pakistan is now seeing robust growth in venture money pouring into technology startups. Pakistani startups are on track to attract more than $230 million in funding in 2021, more funds than all the money raised by Pakistani startups in their entire history. A recent example is Kleiner Perkins, a top Silicon Valley venture capital investment firm, that led a series A round of $17 million investment into Pakistani start-up Tajir. The startup operates an online marketplace for small store merchants in Pakistan. The announcement came via a tweet by Mamoon Hamid, a Pakistani-American Managing Partner at Kleiner Perkins who led the investment. Last year, Tajir raised a $1.8 million seed round.  The company's revenue has increased by 10x since its seed round. 

Pakistan Technology Exports Trend 2007-2021. Source: Arif Habib

Pakistan's technology exports are experiencing rapid growth in double digits over the last decade. Total technology exports jumped 47% to $2.1 billion in fiscal year 2020-21. 

Pakistan University Enrollment Growth. Source: Encyclopedia of High...

The foundation for Pakistan's digital transformation was laid with the higher education reform and telecommunications deregulation and investments starting in the year 2001 on President Musharraf's watch. With a huge increase in higher education funding, Higher Education Commission Chairman Dr. Ata ur Rehman succeeded in establishing 51 new universities during 2002-2008. As a result, university enrollment (which had reached only 275,000  from 1947 to 2003) soared to about 800,000 in 2008. This helped build a significant human capital that drove the IT revolution in Pakistan.      

 

Please watch the following video presentation for more details on Pakistan's technology startup ecosystem:

https://youtu.be/ePApXOM3vkQ

http://www.youtube.com/embed/ePApXOM3vkQ"; title="YouTube video player" width="560"></iframe>" height="315" src="https://img1.blogblog.com/img/video_object.png" width="560" style="cursor: move; background-color: #b2b2b2;" /> 

 Related Links:

 Haq's Musings

South Asia Investor Review

COVID19 Pandemic in Pakistan

State Bank of Pakistan Plans Digital Currency By 2025

Pakistan Broadband Subscriptions Pass 100 Million

Brothers From Rural Pakistan Teaching AI to American High Schoolers

Pakistan's Computer Services Exports Jump 26% Amid Coronavirus Lock...

Pakistan Gig Economy Among World's Fastest Growing

Digital BRI and 5G in Pakistan

Pakistan's Demographic Dividend

Pakistan EdTech and FinTech Startups

State Bank Targets Fully Digital Economy in Pakistan

Campaign of Fear Against CPEC

Fintech Revolution in Pakistan

E-Commerce in Pakistan

The Other 99% of the Pakistan Story

FMCG Boom in Pakistan

Belt Road Forum 2019

Fiber Network Growth in Pakistan

Riaz Haq's Youtube Channel

PakAlumni: Pakistani Social Network

[Riaz Haq]

Pakistan unveils an ambitious plan to become a tech powerhouse.
@Sana_Jamal's exclusive interview with @amerhashmi2, Chairman STZA.


https://twitter.com/STZAOfficial/status/1446866235640188939?s=20

Pakistan unveils ambitious plan to become a tech powerhouse
New tech authority chief reveals how 14 world-class zones will create thousands of jobs

Published: October 08, 2021 18:36
Sana Jamal, Correspondent


Gulf News exclusively spoke to Amer Ahmed Hashmi, the Chairman of Special Technology Zones Authority, Pakistan’s top organisation established in 2021 to oversee the country’s ambitious plans to develop a high-tech economy for rapid eco-nomic growth.


https://www.pressreader.com/uae/gulf-news/20211009/282029035403903

[Riaz Haq]

The business heads expressed keen interest to make investments in Pakistan in their respective domains and also briefed them about their companies. The president later witnessed the signing of three MoUs between Pakistan’s Special Technology Zones Authority with Mastercard, Galaxy racer (E-sports) and Shorooq Partners VC Funds.

https://nation.com.pk/10-Oct-2021/pakistan-offers-promising-busines...

President Dr Arif Alvi on Saturday inaugurated Pakistan Pavilion at Dubai Expo 2020. First lady Samina Alvi and Advisor on Commerce Abdul Razak Dawood were also present on the occasion. The president also visited different stalls of the pavilion where he was briefed about Pakistani products.

The president while meeting with heads of leading investment and technology firms in Dubai said that Pakistan is offering promising business opportunities to foreign investors through one-window operations in sectors of innovation and technology. The President said the one-window facility under Special Technology Zones

Authority is aimed at encouraging and facilitating the foreign investors to expand their information technology footprint in Pakistan.

He said the government has set up the STZA with a mandate to provide world-class digital and physical infrastructure across the country and put Pakistan on global technology radar. The President invited the companies to invest in Pakistan’s diverse sectors particularly in e-business. The business heads expressed keen interest to make investments in Pakistan in their respective domains and also briefed them about their companies. The president later witnessed the signing of three MoUs between Pakistan’s Special Technology Zones Authority with Mastercard, Galaxy racer (E-sports) and Shorooq Partners VC Funds.

[Riaz Haq]

China, Pakistan to enhance scientific cooperation

https://www.thenews.com.pk/print/931728-china-pakistan-to-enhance-s...

Pakistan’s Special Technology Zones Authority (STZA) and Zhongguancun Belt And Road Industrial Promotion Association (ZBRA) of China at a virtual ceremony signed the letter that aims to promote information sharing on science and technology development experience, development of a complete ecosystem, new and emerging technologies, and construction and management of technology zones.

The ceremony was witnessed by STZA chairman Amer Hashmi, ZBRA president Zhang Xiaodong, Pakistan’s ambassador to China Moin ul Haque, and PM’s special assistant on CPEC Affairs Khalid Mansoor.

Under the framework, both parties vowed to facilitate exchanges between high-tech enterprises of both countries in the areas of semiconductors, cloud computing, artificial intelligence, robotics, fintech, blockchain, and biotech for mutually beneficial cooperation.

According to STZA, the collaboration was a cornerstone of its goal to transform the country’s human capital into a high-end future workforce with its tech industry and creating new opportunities for the country’s youth.

“STZA envisions that this partnership with ZBRA will maximize the potential capabilities of the tech industry of both countries,” it said. ZBRA is an organisation headquartered in Beijing, China and legally registered with the Beijing Civil Affairs Bureau. It works to serve Chinese enterprises for high-quality development of the Belt and Road, which will be achieved through projects docking, science, and technology parks cooperation, and 

[Riaz Haq]

#Pakistan #Telecommunication : #PTCL Posts Highest Revenue Growth Since 2013.PTCL is the fastest growing #Fiber-To-The-Home (#FTTH) operator with highest Net adds within FTTH market in 2021. #broadband #Internet https://www.marketscreener.com/quote/stock/PAKISTAN-TELECOMMUNICATI...

The country's leading telecom and ICT services provider, Pakistan Telecommunication Company Limited (PTCL), posted 7% growth in its revenues, owing to a robust commercial strategy that cements its market standing.

The company has announced its annual financial results for the year 2021 at its Board of Directors' meeting on February 10, 2022.

PTCL Group

PTCL Group posted a revenue of Rs 138 billion in the year 2021 which is 6.3% higher as compared to 2020.
PTCL continued its growth trajectory by posting 7% YoY revenue growth which is the highest since 2013.
PTML (Ufone) also posted a revenue growth of 4.3% despite stiff competition in the market.
U Bank continued its growth momentum and has achieved 8.4% growth in revenue.
PTCL Group has posted a net profit of Rs 2.6 billion.
PTCL

PTCL continued its strong performance throughout 2021. PTCL's revenue of Rs 77 billion for the year 2021 is 7% higher than 2020, mainly driven by Broadband and Corporate & Wholesale business segments.
PTCL registered highest Fixed broadband Sales and Net Adds in 2021 since 2015, which allowed PTCL to grow in the broadband business segment.
PTCL is the fastest growing Fiber-To-The-Home (FTTH) operator with highest Net adds within FTTH market in 2021.
The company has posted operating profit of Rs 4.2 billion, which is higher by 21% compared to 2020.
Net profit of Rs 6.9 billion is higher by 14% as compared to last year.
The company is continuously upgrading its existing infrastructure and network, besides expanding FTTH across the country to offer seamless connectivity for greater customer experience. Prompt deployment of FTTH and strong performance in Corporate and Wholesale segments are the cornerstone in PTCL's topline growth, which along with focus on cost optimization program, has significantly increased the company's profitability.

PTCL Consumer Business:

During 2021, the company's Fixed Broadband business grew by 11.7% YoY, whereas PTCL IPTV segment also grew by 13% YoY. Within broadband business, PTCL Flash Fiber, the company's groundbreaking FTTH service, showed a tremendous growth of 61.5%, whereas PTCL CharJi /Wireless Broadband Segment grew by 16.5%. Voice revenue stream has declined on account of lower voice traffic and continued conversion of customers to Over-The-Top (OTT) services.

Business Services:

Business services segment continued its momentum sustaining market leadership in IP Bandwidth, Cloud, Data Center, and other ICT services segments. PTCL's Enterprise business grew by 10% as compared to last year, while Carrier and Wholesale business continued its growth momentum and achieved 9% overall revenue growth. Similarly, international business growth was recorded at 4%.

Being the national telecom carrier and connectivity backbone in Pakistan, PTCL Group strives to provide innovative solutions to accelerate growth for a 'Digital Pakistan' through robust telecommunication infrastructure and a diverse portfolio of services with enhanced customer experience.

[Riaz Haq]

Federal Minister for Information Technology and Telecommunication Syed Aminul Haq has announced the setting up of an IT park in Karachi and a piece of land costing Rs31 billion has been acquired from the Civil Aviation Authority near Karachi airport for the project.

https://tribune.com.pk/story/2359967/it-park-planned-near-karachi-a...

“Plots will be available at much lower rates in the IT park to encourage maximum number of small and medium enterprises (SMEs) associated with IT services to establish their businesses, which will be fully equipped with state-of-the-art infrastructure and all IT-related facilities,” said the minister.

He was speaking at a meeting with traders during his visit to the Karachi Chamber of Commerce and Industry (KCCI).

The move was welcomed by the financial and technology consultants.

“This will enable our SMEs to grow at a faster pace, which is the need of the hour, keeping in mind not just our current economic situation, but also the overall global situation,” said Saad Gadit, Co-founder Savyour.

“This step will help in creating an efficient ecosystem, which comes when likeminded individuals working with the same vision come together. It also helps in model and information sharing; hence the beneficiaries are significantly higher.”

“Although brick and mortar is not a roadblock to technological development and digitisation, it depends on how the piece of land is utilised to create an ecosystem where incentives are timely provided and technological hubs are created for not only tech businesses but also for all the SMEs backed by tech infrastructure, skill development and research and development (R&D),” said Khurram Schehzad, CEO of Alpha Beta Core.

“It comes as great news that Karachi has finally decided to go in the direction of an IT park as other provinces have already started work on similar spaces; it will prove to be a great opportunity for technological exploration in the region,” said Noman Ahmed Said, CEO of SI Global.

“Karachi already ranks higher in technological prowess and it will prove to be more beneficial to begin development in the city by working under one umbrella and generating more revenue.”

Said described IT parks as the areas with scores of facilities, where IT-related knowledge and service industries were attracted and facilitated through the provision of buildings, industry-specific infrastructure and business support services.

“The ultimate objective of an IT park is to provide an environment that will enable the localisation of tech-related companies.”

Moreover, IT parks attract investment, which gives a boost to the economy, while simultaneously creating room for more companies to establish or expand their operations, thereby leading to job creation, he said.

Start-up investment expert Kapeel Kumar remarked that it would be a great initiative for start-ups and SMEs to accelerate development work and would also encourage the youth to start business with ease and tax benefits.