P@SHA calls VPN ban ‘$1bn threat’ to IT industry

KARACHI: The Pakistan Software Houses Association (P@SHA) has once again raised alarm over the severe repercussions of internet disruptions and the potential blocking of virtual private network (VPN) services, warning that such measures could cripple Pakistan’s thriving IT sector.

On Wednesday, Chairperson of P@SHA Sajjad Mustafa Syed appeared on a talk show on a private TV channel and cautioned that banning VPNs could devastate the IT sector “The industry could face a $1 billion loss within the first year, with further declines in subsequent years,” he said.

He said that according to preliminary findings, the IT industry has recorded a 30 per cent drop in orders. This, he said, could translate into a revenue loss of billions of dollars. In terms of job losses, this dip in order number will wipe out around 200,000 to 300,000 jobs from the industry.

This is not the first time for P@SHA’s wake-up call for the government. In August, when Pakistan faced sudden internet disruptions, the then vice president of P@SHA, Ali Ihsan, released a strongly worded letter where he said that “internet disruptions could inflict devastating financial losses estimated to reach $300 million.”

Sajjad said that not only do internet disruptions result in revenue losses, they also lead to penalties. He said that some time back when there was a two-hour-long internet shutdown, an IT firm was slapped with a $2 million penalty. He said that IT firms are service providers, and they have certain targets to meet. Failure to do so will definitely meet with penalties from clients.

Addressing concerns, the chairperson said the restriction is reportedly being imposed due to its misuse by terrorists. While acknowledging the significance of national security, he highlighted that such challenges exist globally.

“We stand firmly with our institutions in the fight against terrorism. However, the white-listing approach for VPNs will harm the IT sector,” he added. Syed proposed an alternative solution, suggesting the establishment of an industry for VPN service providers to ensure monitoring and prevent misuse by terrorists.

Syed urged the government to avoid a blanket ban on VPNs, advocating instead for a collaborative approach involving P@SHA, industry leaders, and stakeholders to create a balanced and secure framework.

“We must safeguard national security without jeopardising the operational needs of Pakistan’s IT sector, which is vital for the country’s economic growth,” he concluded.