The Chairman of the Pakistan Software Houses Association (P@SHA), Sajjad Mustafa Syed, has issued a stark warning that the country’s rapidly growing IT sector is at risk of severe financial losses and potential closures due to recent internet slowdowns and the blocking of Virtual Private Network (VPN) services.
This, he stressed, would jeopardize Pakistan’s position as a competitive player in the global tech market and have devastating consequences for both the local economy and the nation’s exports.
In a statement issued to media, Syed highlighted that the disruptions caused by these actions are an “existential threat” to the Information Technology (IT) and IT-enabled Services (ITeS) industries in Pakistan. He stated that conservative estimates suggest the sector could incur losses worth tens of millions of dollars in the short term, while the long-term damage to the country’s global reputation could be “huge and devastating.”
This urgent call came following the directive from the Pakistan Telecommunication Authority (PTA) that on-registered VPNs will cease to function after the November 30 registration deadline. PTA is only registering commercial VPNs used by businesses, while non-commercial VPNs, commonly used by individuals to access blocked content, will be affected.
P@SHA calls it “irreparable setback” to Pakistan’s fastest-growing sectors
“The IT industry is one of Pakistan’s fastest-growing sectors,” Syed noted, emphasizing that this setback would not only impact IT companies but would also have a cascading effect on other industries, as IT has become a critical enabler across all sectors of the economy. “The blockage of VPN services and the internet slowdown will force many domestic and international IT companies to shut down or severely limit their operations in Pakistan – and it will be detrimental to the most flourishing industry of Pakistan,” he added.
Sajjad said that such a scenario would be “an irreparable setback to the enabling and fruitful initiatives P@SHA is driving with the support of Ministry of IT & Telecom (MoITT), Special Investment Facilitation Council (SIFC); and Prime Minister’s Office (PMO).” It would also be “extremely demoralizing and discouraging for our IT companies, their workforce, startup entrepreneurs, freelancers, and everyone involved in the sector – who are working very hard to bring Pakistan at the forefront of global technology destinations.”
Impact on Export and Global Competitiveness
Syed explained that the IT industry, particularly its export-oriented segments, relies heavily on secure internet connections and VPNs to maintain global business operations. “Data protection and cybersecurity are paramount to our international clients, particularly Fortune 500 companies,” he said. “Connecting to client systems through VPN is a global norm, and it is a basic requirement for doing business.”
The blocking of VPNs, which are integral to securing communication and transactions between Pakistan’s IT firms and their global clients, would result in the loss of crucial contracts, particularly in the booming outsourcing and call center sectors. The IT export sector, which has been growing at an impressive average of 30% per year, was on track to reach $15 billion USD in the next five years. However, Syed warned that such goals could be derailed unless the government takes urgent, corrective measures.
Freelancers and Remote Workers at Risk
In addition to the potential corporate losses, Syed also pointed out the devastating impact on Pakistan’s vibrant freelance community, many of whom rely on secure online platforms and VPNs to manage projects for clients around the world. The country’s large pool of remote workers and freelancers could lose their livelihoods if VPNs are banned, he cautioned.
“Pakistan’s young workforce, especially freelancers, would be severely hampered. Many will be forced to either move their operations abroad or face significant financial difficulties,” Syed said. He warned that the increase in operational costs for IT firms to establish overseas offices would further burden the industry, with estimates suggesting an additional cost of $100 to $150 million annually due to VPN restrictions.
IT Firms and ISPs warn Government against VPN ban
Internet Service Providers (ISPs) and software companies have strongly opposed the government’s planned restrictions on Virtual Private Networks (VPNs), warning that the move could severely impact the IT sector and harm various segments of society. The decision to ban unregistered VPNs by the end of this month, they argue, poses an “existential threat” to businesses and individuals who rely on VPNs for legitimate purposes.
Shahzad Arshad, Chairman of the Wireless and Internet Service Providers Association of Pakistan (WISPAP), stressed the importance of recognizing the broader consequences of a blanket VPN ban. “It is essential to recognize that blanket restrictions or sweeping narratives around tools like VPNs risk alienating segments of society, particularly those who rely on these tools for entirely legitimate purposes, such as IT exports, financial transactions, and academic research,” he said.
Industry leaders have voiced concerns that such measures would disrupt essential operations for businesses, academic institutions, and freelancers, ultimately undermining Pakistan’s position in the global digital economy.
Call for Dialogue and Strategic Solutions
Syed called on the government to engage with P@SHA, industry leaders, and relevant stakeholders to devise a balanced, secure framework that ensures national security without undermining the needs of the IT industry. He urged for strategic foresight in addressing the issue, emphasizing that an unplanned blanket ban on VPN services would have “irreparable consequences” for Pakistan’s IT sector and its export growth.
P@SHA has offered to facilitate an immediate roundtable discussion to develop actionable measures that will protect both Pakistan’s national security interests and the operational needs of its growing IT and ITeS sectors.
“An uncoordinated approach will result in long-term damage to the country’s most promising industry,” Syed warned. He clarified that the IT industry stands with the state and the government in its fight against all forms of terrorism – be it physical, psychological, financial, or cyber terrorism due to the misuse of the internet. However, the economic well-being and the exports of the country are indispensable to help overcome the unending crises of balance of payments (BoP); current account deficit (CAD) and socio-economic issues – which stem from unemployment, poverty and lack of skills development, he added.
As Pakistan’s IT industry continues to face these mounting challenges, stakeholders remain hopeful that dialogue and collaboration will lead to a resolution that balances security with economic growth, enabling the sector to thrive on the global stage.