A Digital Paradox: Expensive Yet Unreliable Internet
Pakistan’s internet landscape presents a paradox—widespread yet expensive, fast in some areas yet painfully slow in others. With over 140 million users, the country should have a robust digital infrastructure. However, high costs, slow speeds, and frequent disruptions plague connectivity. The root cause? A near-duopoly controlling the nation’s internet gateways, limiting competition and keeping prices high.
The Wireless and Internet Service Providers Association of Pakistan (WISPAP), under Chairman Shahzad Arshad, has highlighted this as a structural crisis rather than a mere technical issue. This article explores how Pakistan’s internet gateways operate, the monopoly’s impact, and policy solutions to create a competitive and affordable internet ecosystem.
The Monopoly Behind Pakistan’s Internet Struggles
Internet access relies on global undersea cables, connecting local networks to international data highways. In Pakistan, these cables land in Karachi, managed by two primary operators: Pakistan Telecommunication Company Limited (PTCL) and Transworld Associates (TWA). They control access to seven undersea fiber optic cables and two smaller overland links, acting as gatekeepers for the entire nation.
READ MORE: Vivo Y56 5G Launched: A Game-Changer in the Mid-Range Smartphone Market
These companies dictate pricing and bandwidth distribution, creating a bottleneck that limits competition and keeps internet costs artificially high. As Shahzad Arshad explains, “The gateways are Pakistan’s digital umbilical cord. But when two companies control the cord, they don’t just charge—they strangle.”
High Prices, Slow Speeds, and No Alternatives
With PTCL and TWA controlling access to international bandwidth, smaller Internet Service Providers (ISPs) must buy bandwidth at high rates, often pegged to the US dollar. As a result:
- ISPs face shrinking profit margins, especially during currency devaluation.
- Pakistan has some of the highest broadband costs in South Asia, despite offering slower speeds than regional competitors.
- In 2024, ISPs saw margins shrink by 25% due to fluctuating exchange rates, yet PTCL and TWA continued raising prices.
For comparison:
- Pakistan: 20-30 Mbps at high costs
- Bangladesh: 50 Mbps at nearly half the price
- Singapore: Highly competitive market driving down costs
Pakistan’s internet is also highly vulnerable. Since all international traffic is routed through Karachi, any disruption—such as undersea cable failures—causes nationwide slowdowns. In 2023, a single cable fault led to a 40% drop in internet speeds across the country.
“A single technical fault can disrupt the entire country,” warns Arshad.
This affects businesses, freelancers, and startups. Pakistan’s freelancing sector, generating $1.2 billion in 2024, suffers from unreliable connectivity. Similarly, foreign investors hesitate due to unstable digital infrastructure.
Global Best Practices: Solutions for Pakistan
To improve internet accessibility and affordability, WISPAP has proposed several reforms, inspired by successful global models:
1. Diversifying Internet Gateways
- Example: Brazil reduced broadband costs by 30% in five years by introducing multiple entry points.
- Solution: Pakistan could develop Gwadar as an additional gateway, reducing Karachi’s monopoly.
2. Local Currency Agreements
- Example: Malaysia negotiates bandwidth payments in local currency, reducing exchange rate fluctuations.
- Solution: Implementing this in Pakistan could lower costs by up to 20%.
3. Collective Bandwidth Purchasing
- Example: South Africa allows ISPs to pool resources and buy bandwidth directly, eliminating intermediaries.
- Solution: Pakistan could adopt a similar approach to increase competition and efficiency.
4. Strengthening Local Infrastructure
- Example: Japan has multiple Internet Exchange Points (IXPs) to keep domestic traffic within the country.
- Solution: Pakistan could develop IXPs in Lahore, Islamabad, and Peshawar to reduce dependence on international cables.
5. Regulatory Oversight
- Example: The European Union enforces strict policies to prevent monopolistic practices in telecom markets.
- Solution: Pakistan’s Competition Commission could investigate PTCL and TWA for potential market abuse and implement fair pricing policies.
The Need for Reform
Pakistan has an opportunity to reshape its digital future. The Africa-1 submarine cable, with a $70 million local investment, could expand bandwidth capacity. However, without regulatory changes, this could strengthen the existing duopoly rather than improve competition.
If reforms are implemented effectively, Pakistan could:
- Double freelancing revenue to $2.5 billion by 2030.
- Reduce internet costs and improve accessibility for millions.
- Encourage digital startups and foreign investments by ensuring stable connectivity.
As Shahzad Arshad emphasizes, “We have the talent and ambition. What we need is an open and competitive internet ecosystem.”
Pakistan’s digital future depends on whether policymakers will challenge the status quo or let the country remain stuck in the slow lane.
