IT Companies Face Potential Losses and Closures Amid VPN Restrictions, Internet Slowdown

• Sajjad Mustafa Syed, warns of potential financial losses damage due to internet slowdown and VPN service blocking.
• The IT sector’s exports reached $3.2 billion in FY24, but current challenges could reverse these gains
•  Syed predicts short-term losses of tens of millions of dollars, with long-term reputational damage.

Sajjad Mustafa Syed, Chairman of the Pakistan Software Houses Association (P@SHA), has issued a dire warning about the potential consequences of the ongoing internet slowdown and the blocking of virtual private network (VPN) services. He stated that these disruptions could pose an existential threat to Pakistan’s IT industry, leading to significant financial losses, service interruptions, and reputational damage, particularly in the export of IT and IT-enabled services (ITeS).

The IT sector has seen exports reach $3.2 billion in FY24, a significant achievement, but the current challenges could reverse these gains. According to Syed, even conservative estimates predict that the industry could suffer losses amounting to tens of millions of dollars in the short term, with even more severe reputational damage in the long run. This could undermine Pakistan’s standing in the highly competitive global IT market.

Syed emphasized that such disruptions would severely impact one of Pakistan’s fastest-growing industries and could also have a cascading effect on other sectors that rely on IT services. He warned that many domestic and international IT companies might be forced to shut down or significantly scale back operations in Pakistan, leading to an irreparable setback for the industry’s growth, skills development, and employment generation.

The P@SHA Chairman further stressed that this would deal a blow to the enabling initiatives supported by the Ministry of IT & Telecom (MoITT), the Special Investment Facilitation Council (SIFC), and the Prime Minister’s Office (PMO). The situation is expected to demoralize IT companies, start-ups, freelancers, and other stakeholders who have been working tirelessly to establish Pakistan as a global technology hub.

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