Pakistan’s IT Sector is in Bad Shape Amid Internet Disruptions

Internet outages in Pakistan this month are causing alarm among businesses already struggling in a troubled economy. Executives, investors, and tech industry leaders warn that these disruptions are hurting business operations and making investors nervous.

This comes at a critical time when Pakistan depends on its growing information technology sector to help pull the country out of its cycle of economic crises. Internet monitoring groups have reported a noticeable drop in internet speeds and service interruptions affecting popular platforms like WhatsApp, the Meta-owned messaging service widely used across Pakistan.

Nadeem Elahi, who heads TRG, a major venture capital firm in Pakistan, is sounding the alarm about the country’s worsening internet problems. Elahi, whose firm also runs Pakistan’s largest outsourcing company, says internet connectivity is the worst he’s seen in the past year.

He estimates the quality of internet connections has plummeted by 30% to 40%. Reliable internet is essential if we want to attract global clients to our business processing operations, Elahi said.

Pakistan’s technology sector, a rare bright spot in a struggling economy, is facing a major obstacle: unreliable internet service. The government depends on the country’s growing IT workforce, including software developers and freelancers, to boost exports and attract foreign investment.

This is crucial as Pakistan grapples with a chronic shortage of foreign currency that has forced it to seek bailouts from the International Monetary Fund (IMF) two dozen times. Despite these challenges, IT exports reached a record $3.2 billion in the year ending in June, a 24% increase according to the State Bank of Pakistan.

However, recent internet outages threaten to undermine this progress. Kalsoom Lakhani, co-founder of i2i Ventures, a venture capital firm focused on Pakistan, warns that the internet problems are damaging the country’s reputation among international investors.