Telcos Oppose Rightsizing of IT Ministry

Telecom operators have raised significant concerns over the rightsizing of the Ministry of IT and Telecom (MoIT&T). The Telecom Operators Association has conveyed their apprehensions in a letter to the Minister of State for IT and Telecom, Shaza Fatima Khawaja, emphasizing the ministry’s crucial role in policy-making for the telecom sector. They argue that dissolving the ministry would negatively impact the IT and telecom sectors and Digital Pakistan. According to the letter, MoIT&T has a pivotal role in the governance structure of the sector, following global best practices and Pakistan’s WTO commitments. Since the year 2000, the ministry has overseen policy evolution and implementation, leading to substantial growth in the telecom sector. The policy environment fostered by the ministry has attracted significant investment, totaling $28 billion, with $11 billion as foreign direct investment. As a result, 195 million telecom subscribers are being served, achieving a teledensity of over 81 percent of the population, and contributing around $27 billion to the national exchequer through various taxes and fees. The association underscores that specialized domain knowledge is essential for managing the IT and telecommunications sectors effectively. The potential dissolution of the ministry could lead to a loss of this expertise, resulting in inefficiencies in addressing sector-specific challenges. A dedicated ministry ensures that the unique needs of these sectors are met with focused attention, and integrating these functions into another ministry could dilute this focus, leading to slower response times and less effective policy implementation. The letter further states that the MoIT&T has been instrumental in creating a stable regulatory environment that supports innovation, investment, and growth. Dissolving the ministry could introduce policy and regulatory uncertainty, disrupting ongoing projects and affecting long-term strategic plans. Investors prefer sectors with a definitive governance structure and predictable policy environment, and the presence of MoIT&T signals a clear commitment to the IT and telecom sectors. Pakistan, as a signatory to the GATS agreement under the WTO and the Reference Paper on Telecommunications, has international commitments to maintain independent policy-making, regulation, and operations. A separate dedicated policy-making entity for the telecommunications sector is necessary to ensure compliance with these commitments. According to the letter, the MoIT&T also provides crucial regulatory guidance, support, and coordination to businesses within the IT and telecom sectors. Its dissolution could lead to disruptions in business operations, complicating compliance and strategic planning. The ministry serves as a central point of contact for various stakeholders, including industry associations, businesses, and consumers. The dissolution could lead to confusion and diminished engagement, impacting collaborative efforts and feedback mechanisms essential for sectoral progress. Additionally, the MoIT&T has been a key driver of digital transformation and innovation in Pakistan. The policy environment driven by the ministry has resulted in the establishment of world-standard institutions like the USF and R&D Funds, which have successfully extended telecom services to underserved areas and promoted innovation. These programs require continued policy focus rather than disbandment. The association also points out that the manifesto of the Pakistan Muslim League-Nawaz (PML-N) pledged to enhance the ministry’s scope and evolve it into a more potent Ministry of Digital Economy. Dissolving the MoIT&T would contradict this commitment and potentially hinder progress towards this goal, the letter added. The Telecom Operators Association argued that retaining a dedicated ministry is essential to ensure sector-specific expertise, policy stability, economic growth, stakeholder engagement, and strategic oversight. The dissolution of the MoIT&T could lead to significant disruptions and challenges, affecting not only the IT and telecom industries but also the broader Digital Pakistan initiative. It is crucial to carefully consider these factors to preserve the policy-making focus vital to the sustainability and growth of Pakistan’s telecommunications and IT sectors.