Data centers in Pakistan need fresh investment and trained people

As the data centre landscape continues to, the industry is expected to grow exponentially. With growing reliance on digital connectivity, evolve demand is likely to ramp up further due to the imminent rollout of 5G, IoT-linked devices, data localization and cloud adoption.

The 5G, the next big thing in Pakistan telecom, is not just about communications. If 4G was for data, 5G would be for device connectivity. The superfast 5G network is expected to create a network of connected devices, enabling millions of applications capable of transforming every sector and every minute event happening across the country.

Time is changing at a pace and intensity never imagined before. The Covid-19 pandemic is creating uncertainties across all segments of society. A similar instance occurred in the form of the Spanish Flu in 1920, which affected almost one-third of the entire population, with around 50 million casualties.

During that time, there was little hope in terms of connecting each other and managing day-to-day activities. People had no option but to stay indoors with the minimum resources available to them. A century later, as the entire world fights back the Covid-19 pandemic; communications technologies have taken over some of the key roles in crisis management and helped the societies confront the crisis with utmost diligence and planning.

Information and Communications Technologies (ICT) has emerged as the backbone to help humanity deal with any crisis, not just the epidemic but hurricane, earthquake, flood or any manmade disasters. We also see how ICT enables Connected Societies, which are progressing faster, building sustainable communities through active participation of the citizens. As per the UN estimates, digital technologies have reached around 50 percent of the developing world’s population in only two decades and are transforming societies. By enhancing connectivity, financial inclusion, access to trade, and public services, technology can be a great equalizer.

In this regard referring to India makes the things better to understand. In India, there are over 760 million Smartphone users and nearly 700 million Internet users engaged with their peers over the communications network. Also over 63 million SMBs conduct businesses contributing a significant share to the country’s GDP and where nearly 1.38 billion population, including those in the remote villages, leverage the nation’s digital infrastructure to conduct day-to-day transactions. It is not an exaggeration to state that all these changes happened over the past 2-3 decades, to be precise since 1995 when the country’s telecom infrastructure was opened to private players for the launch of 2G services.

Similarly, Pakistan telecom industry has come a long way, tackling the challenges one after another. The journey was tough for the telecom operators, as they had to deal with the emerging technology trends while also seeking investments to build networks across diverse telecom circles. Operators in Pakistan are among those with the lowest ARPU, but surprisingly the ones offering the lowest data tariffs in the world. The major factor behind this was the hyper-competition prevailing in the market ever since a major consolidation impacted the industry. Now all the private sector players are preparing for the next round of communication revolution around 5G.

As Pakistan nears saturation in 4G connections, the industry is eagerly waiting for the launch of 5G. Though the pandemic created uncertainty over the 5G spectrum allocation, current developments indicate that the government will have to auction the 5G spectrum in the near future.

The time is appropriate for the launch of 5G for two reasons. Firstly, the pandemic has induced connectivity demands to an all-time high as citizens require high-speed data connectivity to fulfill their work/study needs. The current trend is expected to continue creating pressure on the existing infrastructure, 5G networks will be crucial to serve the rising needs. Analysts believe 5G will create momentum around enhanced mobile broadband (eMBB) that will accelerate the use of high-definition video, augmented and virtual reality, and real-time gaming and SERS (Surface-Enhanced Raman Scattering) will also benefit from streaming movies, shows, and videos faster than ever.

A major factor favoring 5G is the focus on local manufacturing. The Government of Pakistan will have to encourage entry of local players. The production linked scheme is expected to give an impetus to local manufacturing of all products, including Smartphones and other devices, telecom gears, and components. It is expected to not only make the local industries self-reliant but will also boost the country’s export capabilities, generate employment and contribute to the nation’s exchequer.

ITU commends the countries which use ICTs to promote women’s empowerment, youth, people with disabilities, digital financial inclusion, SMEs and entrepreneurship, and connecting the rural communities. In Pakistan, we have seen how ICT has enabled employment, entrepreneurship, rural education, public infrastructure, healthcare, smart cities and every industrial segment to deliver better results faster. The transformation has just begun; more is on way.

The government has to formulate a scheme to incentivize investments to set-up hyper-scale data centers in the country and boost the capacity of the existing data centre ecosystem, besides working on new segments like drones and robotics to develop their manufacturing. Pakistan has to prepare a scheme or policy on hyper-scale data centers, and also a scheme for incentivizing investments in hyper-scale data centers.

Instead of creating a scheme entirely at its own, the government will have to consult the market players to understand what kinds of interest is there, what does the market expects from the government so that a scheme can be formulated, which can yield the desired results.

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