A mere 24-hour outage of internet services causes a direct loss of Rs 1.3 billion, a staggering figure that works out to about 0.57 percent of the country’s average daily GDP.
A landmark recent study by the Pakistan Institute of Development Economics (PIDE) – “The Economic Cost of Internet Outages” – highlighted the dire consequences of internet outages on the Pakistani economy.
According to PIDE Vice Chancellor Dr. Nadeemul Haque and PIDE Research Fellow Muhammad Shaf Najeeb, Internet has become a basic necessity in modern times. However, Pakistan’s internet infrastructure lags behind both in terms of quality and coverage.
The recent internet outages in various parts of Pakistan have had a profound impact on several sectors, causing significant financial losses and operational challenges. Online cab services, online food delivery services, freelancers, transport companies, and postal services have all been badly affected by prolonged disruption of internet services.
A PIDE infographic shows that online cab services, a cornerstone of modern transportation, saw a staggering 97 percent drop in ridership on days when the internet was down. This significant downturn equates to a daily loss of Rs 29 to 32 million to the industry.
Similarly, online food delivery services faced a 75% drop in the number of orders, resulting in a daily loss of Rs 135 million.
Meanwhile, the freelance community, which plays an important role in Pakistan’s economy, has also felt the internet’s constraints.
Refusal of orders to Pakistan-based freelancers resulted in a loss of over $1.3 million in income, equivalent to Rs 390 million, affecting the livelihood of many and the overall national economy.
In addition, the suspension of 3G/4G services for one day causes a loss of Rs 450 million to the telecommunication sector alone.
Additionally, PIDE previously estimated the economic costs of the protests to be around 2.0 percent of GDP. Economic activity in the country is significantly affected by disruption of economic activities due to protests or disruption of internet services.
In a statement, Dr. Nadeemul Haque said that access to high-quality Internet not only increases opportunities for the youth, especially in remote areas, but also plays an important role in bridging the divide between the privileged and the common people. she does. The use of online tools for educational and vocational purposes can empower rural youth to compete nationally and internationally.
PIDE has been a consistent advocate of “Internet for All” and believes that the government should prioritize nationwide Internet coverage as a matter of urgency. Additionally, regulatory measures should be introduced to encourage telecommunications companies to expand Internet access across the country. Spectrum auctions should be designed to ensure universal Internet coverage rather than just as a means of generating revenue.
The Internet is an important tool for facilitating economic transactions and business operations. It is sad to note that internet shutdowns in Pakistan, often for arbitrary reasons, disrupt essential economic activities.
PIDE is committed to promoting a digital landscape that not only empowers individuals but also contributes positively to the economic growth of Pakistan. The research findings underscore the urgent need to address the challenges facing Pakistan’s internet infrastructure to ensure a prosperous and connected future for all.