Pakistan’s internet monopoly chokes growth: Wispap

KARACHI: Pakistan’s internet ecosystem is being stifled by a duopoly that keeps costs high and speeds low, industry experts warn, as concerns mount over the country’s digital future.

In a statement released on Tuesday, the Wireless and Internet Service Providers Association of Pakistan (Wispap) has called for urgent regulatory intervention to break the stranglehold of two telecom companies -- a state-linked titan and a private operator -- over the country’s internet gateways.

Pakistan, a country of over 240 million people, relies on just two operators to manage its access to global undersea fibre-optic cables. These companies dictate the cost of bandwidth for smaller internet service providers (ISPs), who in turn pass on the high prices to consumers, according to Wispap Chairperson Shahzad Arshad.

“The gateways are Pakistan’s digital umbilical cord,” Arshad said. “But when two companies control the cord, they don’t just charge -- they strangle.” Pakistan’s international connectivity is routed through Karachi, where seven undersea cables land, along with two smaller overland links. Pakistan Telecommunication Company Limited (PTCL) and Transworld Associates (TWA) act as intermediaries, purchasing bandwidth from global cable consortia and reselling it at a markup. The arrangement has left Pakistan with some of the most expensive internet rates in South Asia.

The price of bandwidth is pegged to the US dollar, exposing ISPs to currency volatility. “When the rupee tanks, our costs explode,” Arshad said. “In 2024 alone, ISPs saw margins shrink by 25 per cent due to currency swings, yet PTCL and TWA keep hiking rates.”

Pakistan’s average internet speed lags behind its regional peers, with broadband speeds of 20-30 Mbps compared to Bangladesh’s 50 Mbps at half the price. Beyond costs, Pakistan’s internet infrastructure remains fragile. In 2023, a single undersea cable failure disrupted connectivity nationwide, exposing the risks of having a concentrated gateway system.

Wispap proposes a series of measures to increase competition and lower costs, drawing inspiration from international models. The association suggests opening additional internet gateways in cities such as Gwadar, following Brazil’s example of diversifying connectivity hubs beyond Sao Paulo.

Other recommendations include negotiating bandwidth deals in rupees instead of US dollars, as Malaysia has done, and allowing ISPs to pool resources to purchase bandwidth directly from global providers, similar to South Africa’s model.

The industry body has also urged the government to establish independent internet exchanges across the country to reduce reliance on international bandwidth for domestic traffic and to enforce antitrust measures similar to those in the European Union.

Pakistan is set to receive additional bandwidth with the arrival of the Africa-1 cable, but Wispap warns that without reform, the new capacity will only reinforce the existing monopoly. “A fatter profit for the same old duo,” Arshad cautioned.

With nearly 40 per cent of Pakistan’s population still offline, breaking the current bottleneck could unlock substantial economic benefits. Wispap estimates that lowering broadband costs could double the country’s freelancing revenue to $2.5 billion by 2030 and boost startup growth.

“This isn’t charity,” Arshad said. “It’s unleashing Pakistan’s potential -- student by student, startup by startup.” The government now faces a choice: introduce competition and reform its internet policies or risk leaving Pakistan’s digital economy in the hands of a tightly controlled duopoly.