With CPEC, climate favourable for growth of IT start-ups

KARACHI:While Pakistan’s information technology (IT) ecosystem is evolving rapidly, experts suggest the government and private sector should lay a strong foundation for fast, healthy and balanced growth of product and service-based companies.

Easypaisa can be expressed as a product-based company while TRG is a service-focused concern. In 2016, Pakistan had over 2,000 software houses and now it is the fourth largest base for freelance IT professionals. Of these, only around 10% are believed to be running product-based companies.

“I would be surprised if there were any more,” said Syed Ali, vice chairman of the Pakistan Software Houses Association (P@SHA).

Pakistan’s IT landscape is changing drastically. The IT industry’s size doubles every year and its private sector is expanding. It is the best time for domestic start-ups to cash in on the favourable situation as both private and public sectors need software to run their systems.

“The market is witnessing historical changes; private firms in the country never allocated around Rs50 million for IT services, now it is becoming a trend,” remarked Sajjad Syed, CEO of Excellence Delivered and former managing director of Germany-based software firm Systems, Applications and Products (SAP) Pakistan.

However, Pakistan has been placed at 110th position on the World Economic Forum (WEF)’s Networked Readiness Index, which measures tendency of countries to exploit the opportunities offered by information and communication technology.

India is ranked 91st, Sri Lanka 63rd and China 59th on the index that is also called the Technology Readiness Index.

The China-Pakistan Economic Corridor (CPEC) provides a massive opportunity to Pakistan’s software developers, which may also help improve the country’s ranking in the WEF index.

Scores of software would be needed to run projects developed as part of CPEC since Chinese were focusing on mass employment sectors, but before that Pakistan should start developing software-based companies, suggested Sajjad Syed.

“We can quadruple our IT industry by offering software products to CPEC projects,” he emphasised.

Most software houses in Pakistan come under tier-III category with less than 100 employees. Very few would have more employees.

“The share of service-based companies in the IT industry is nine times bigger. Pakistan needs large service-based companies while there should also be more product-focused firms,” he said.

Service-based companies would hire people in large numbers in accordance with project requirements as mostly foreign companies asked for more than 2,000 sources (engineers) that no Pakistani company could provide at a time, said the P@SHA vice chairman, who is also 7Vals CEO.

“So, the best thing is to focus on product-based companies that need relatively smaller staff and cater to a large number of customers,” he said.

7Vals has recently entered Pakistan’s market with a deal with Habib Bank Limited (HBL). Earlier, it provided maintenance software to 20% of Fortune 500 companies.

Its software will help HBL in work order management, recurring maintenance and asset custodianship in its northern, central and southern branches.

Despite hiring people in large numbers, the service-focused companies offer a considerably lower pay for long-hour jobs to the dismay of employees. These companies also lay off workers on a large scale.

India, which has a $160-billion IT industry, laid off more than 56,000 employees in 2017 alone, therefore, Pakistan needs to create balance.

Pakistan’s IT industry showed a 41% growth in 2014-15 and it is going to be a $10-billion industry by 2025, according to the Pakistan Software Export Board.

To the contrary, product-based companies demand high skills and pay handsome remuneration packages. Facebook and WhatsApp are popular examples that pay hundreds of thousands of dollars to their employees. These companies look for creative individuals that could understand needs of the market and come up with innovative ideas to meet them.

“Pakistan needs business-to-business (B2B) products a lot since domestic companies are realising the importance of new technology in increasing their efficiency,” said Syed Ali.

Heavily taxed

“The tax system of Pakistan needs to be fixed to promote IT companies, particularly those that are focused on product development,” said Sajjad Syed while pointing out that an IT exporter could at least make $25,000 worth of exports.

IT is a heavily taxed industry in Pakistan as it is forced to pay tax on revenues. In contrast, the industry around the world is taxed on profits and not on revenues.

If a company makes revenues of Rs100 million a year, it has to pay up to 8% in income tax which virtually wipes out all the profit and takes away the incentive of opening an IT company.

Services tax in Punjab stands at 16% whereas Sindh has imposed 13% services tax. “Dubai seems to be a good option to start a company and Pakistani entrepreneurs are going there,” said Sajjad Syed.

According to him, when an entrepreneur comes up with a new IT product, the initial two to three years are spent on making experiences, but the tax system is hindering product-based companies from developing their businesses.

Public sector’s role is very important in the growth of IT companies which is reflected in the US where the government is the biggest customer of Spacex.

Whenever Pakistan’s government needs something, it sets strange conditions like experience of 5 to 10 years for a company which, of course, is impossible for most of the Pakistani IT start-ups,” said Sajjad Syed.

“It is easier for Pakistani companies to win big business deals in the US than in Pakistan due to these kinds of conditions.”

Big News Zong 4G internet services launched in Gwadar

ISLAMABAD: Zong 4G network has launched its operations in the port city of Gwadar to cater to the increasing requirements of connectivity under the China-Pakistan Economic Corridor (CPEC), a statement said on Thursday.

The company said the launch of 4G services in Gwadar implies that foreign citizens and local residents who have been pursuing their respective business endeavours will have unhindered access to the 4G services.

The services will be offered at affordable rates, it said. “Massive network expansion symbolises our customer-centric approach to ensure that the interests of consumers stay above all the rest by offering them best and affordable network,” Zong 4G said. “We keep expanding our operational portfolio to ensure enhanced operations in cities, towns, villages, and far-flung areas,” it added.

Alibaba purchases Pakistani ecommerce website Daraz

FRANKFURT: Alibaba Group has bought the entire share capital of Rocket Internet’s South Asian e-commerce platform Daraz Group, Rocket Internet said on Tuesday.

Daraz, founded in Pakistan in 2012, operates online marketplaces in Pakistan, Bangladesh, Myanmar, Sri Lanka and Nepal. The unit will continue to operate under the same brand following the sale to Alibaba, Rocket said.

“The sale of Daraz to Alibaba is another testament to Rocket Internet’s ability to successfully scale and exit market-leading companies”, said Oliver Samwer, CEO of Rocket Internet.

“The acquisition by Alibaba is a tremendous success for the entire team working at Daraz,” he added in the press release.

CPECB has become medium to connect Chinese Businessman

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China Pakistan Economic Corridor Businessman network has earned the title of honored and respected businessman network which has become a major medium to connect Chinese businessman with Pakistani businessman and all other belt and road member countries businessman directly.CPECB is maintaining its policy and services very strictly which allow the only businessman to become a member and building strong networking with other members in a note of business deals.

CPECB has offered multiple privacy to its members to ensure only active businessman who is importer, exporter, industrialist or services provider can interact with the clean and respected network to establish serious business relations.

As CPEC is getting in action where lots of businessmen looking for medium to connect with Chinese, Pakistani and another belt and road member countries like


CPECB.COM is active and in action which will enhance Pakistan export, trade, service, construction, agriculture, automobile, Technology, human resources and all the industry which are active in Pakistan or planning for new incorporation through CPECB.COM because non Pakistani who are interested can reach all sector companies owners in one place and get facilitate to establish business by developing relations and that what CPECB.com is offering.

If you are also looking to interact with above region members then you can apply for cpecb.com membership. For reference, you can visit https://www.cpecb.com


Alibaba officials meet with TCS & Yayvo officials in Karachi

Ever since Anusha Rahman, Minister of Information Technology announced that Alibaba will soon be launching in Pakistan along with payment gateway, AliPay. Every news regarding Alibaba is considered a step closer to the launch of Alibaba e-commerce conglomerate in Pakistan. The most recent development on this end has been the meeting between TCS/Yayvo and Ali Baba officials in Karachi.

Although, TCS and Yayvo have kept most of the meeting details a secret. There is a strong speculation that this will be a start of a long-term collaboration between TCS and Alibaba on the logistics end. During the meeting, Alibaba officials visited the warehouse facilities of TCS to see the infrastructure and processes. The team also visited the Yayvo head office in Karachi and discussed the current and upcoming e-commerce trends in the country.

The technology insiders are calling it an important meeting. The rumor mill has been strong around Alibaba in the country, where leaks regarding the acquisition of local e-commerce stores and local payment solutions are coming up every now and then. But, there has been no official word from any of the involved parties.

For any e-commerce platform to be successful, it should have a strong technology platform, secure and flawless payment mechanism and streamlined logistics. For these, either Alibaba will come with its own solutions or partner up with already established solutions in Pakistan.

Pakistan Desire For CPEC-Operate Aviation Industry Extension

In a one-day symposium – titled “CPEC vis-à-vis Opportunities for Aviation Industry and Way Forward” – the Government of Pakistan, the Pakistan Air Force (PAF), the Pakistan Civil Aviation Authority (PCAA) and members of the private sector collectively expressed hope that the China Pakistan Economic Corridor (CPEC) would spur growth in Pakistan’s aviation sector.

The Daily Times (Pakistan) compiled a report outlining the thoughts and aspirations of each symposium participant, which included the Federal Interior Minister Ahsan Iqbal, the PAF Chief of Air Staff (CAS) Air Chief Marshal (ACM) Sohail Aman and other leading officials and industry representatives.

Short-term objectives center on guaranteeing the security of CPEC projects. In this respect, the PAF had outlined its success in building a capable intelligence, surveillance and reconnaissance (ISR) element for providing situational awareness for all relevant parties, including its sister services the Pakistan Army and the Pakistan Navy. The PAF had also expressed confidence in its ability to counter asymmetrical threats through precision-guided airstrikes. It is also committed to providing search-and-rescue support.

The panel’s long-term aspirations echoed earlier government sentiments, namely of channeling projected economic growth from CPEC to effect industry gains. In this case, it is aviation.

PCAA Additional Director of Air Transport International Regulation Syed Muzaffar Alam projected that air travel in Pakistan will see an additional three million passengers in the next three to four years. Alam believed that this growth will present opportunities for growth in Pakistan’s commercial airline sector, be it new airlines or expanded ground support providers. In relation, PAF Air Vice Marshal Razi Nawab, the Deputy Managing Director of the Shaheen Foundation, stressed that investment be made in raising new maintenance, repair and overhaul (MRO) entities and airlines in Pakistan to support growth in air travel.

Interior Minister Dr. Ahsan Iqbal called for developing Pakistan’s aviation development and manufacturing sectors, particularly through “Technology Intensive Clusters” at Pakistan Aeronautical Complex (PAC) in Kamra. He also advocated for research and development, joint-ventures and public-private partnerships.

The participating stakeholders proposed raising a joint working group comprising of representatives from the Government of Pakistan, the PAF, PCAA, the private sector and academic institutions to steward the objectives discussed at the symposium.

Notes & Comments:

There are two overarching aspects to the symposium. First, the necessity of airborne systems for providing security to CPEC projects. Second, aspirational aims for using CPEC to fuel growth in Pakistan’s aviation sector, be it increasing demand for commercial air services or spurring relevant industry work.

For the first aspect, the PAF tabled the ISR and precision-strike capabilities it built to fulfill Pakistan’s counterinsurgency (COIN) requirements. The PAF ISR element comprises of diverse assets, among them C-130Bs fitted with FLIR Systems Star SAFIRE III electro-optical and infrared (EO/IR) turrets, Falco unmanned aerial vehicles (UAV) configured with L-3 WESCAM EO/IR turrets and F-16s equipped with DB-110 photo-reconnaissance and Sniper advanced targeting pods (ATP).

Besides building situational awareness of the ground environment, these assets can pivot to provide target acquisition and guidance support for precision-strikes. This is done in conjunction with the EO/IR-equipped C-130Bs or Joint Terminal Attack Controllers laser-designating targets for F-16s armed with GBU-10 or GBU-12 laser-guided bombs (LGB), or stand-alone with F-16s using the Sniper ATP for targeting, terminal guidance and deploying LGBs

Apart from later including the JF-17 to undertake precision-strike and partial-ISR (via LGBs paired with the Aselsan ASELPOD targeting pod), it is unlikely that the PAF will significantly change its equipment-set for asymmetrical engagement. In fact, the integration of the PAF into the CPEC security dynamic appears to mirror its current approach to COIN, if not be an extension of the Pakistan military’s existing push against non-state actors and asymmetrical threats.

The second aspect is less grounded at this time, but some aspects, such as the call for expanding Pakistan’s MRO base and deepening the aviation-related manufacturing, echo government and PAF goals set under Project Azm. In July, Ahsan Iqbal (then Minister of Planning and Development) stated: “I hope that this … the city will not only help us develop capabilities in defense or security domains, but I sincerely believe that this aviation city will also become the birthplace of the commercial aviation industry in Pakistan.