Pakistan's untapped market: the rural sector

Wednesday, 21 September 2011 11:08  |  James Barton

Like many emerging markets, Pakistan faces the challenge of connecting its rural population. In this interview Naeem Zamindar , the CEO of converged communications provider Wateen Telecom, warns that the rural market’s importance should not be underestimated.

Is it worthwhile to target the rural sector of the country?

Yes. The rural population in Pakistan was reported by the World Bank to be around 106 million in 2008. 68 percent of the country’s population – that is around 122 million people – lives in rural areas. This shows that there is a huge market that remains untapped.

Aside from the commercial aspects, if we were to focus on the country’s rural areas this would in turn result in an increase in employment opportunities, an increase in education, an increase to the country’s GDP; it would also help even out the distribution of wealth in Pakistan. In rural areas, ICTs are directly contributing to economic growth by creating access to economic opportunities and development.

We are working with the Higher Education Commission and Virtual University, who have online education programs that can be accessed from anywhere in the world. Imagine if we connected these regions through the internet: it would open access to higher education and a promise of a better life for people living in those areas.

'Using the Internet for Rural Sustainability' - do you believe in this concept and what are your thoughts on it?

According to recent estimates, almost 1.5 billion of the world’s poorest people live in rural areas. The internet - and its capacity to provide an infrastructure for all communications needs - can help connect these people to the rest of the world. Add to this the actual employment opportunities you create in terms of sales, management, after-sales service centres – you could create and trained a completely new skilled workforce from scratch. This is why the Government and USF are incentivising us to set up educational broadband centres in the rural areas to help the people there gain access to this knowledge.

What are some of the barriers in place that are placing hurdles in the adoption of Broadband fully in rural circles?

The main barrier in the adoption of broadband in rural Pakistan is the lack of cohesive policies by the Government in the IT sector. Broadband provision is only possible for end customers provided they have a tool for using it, i.e. computers. Unfortunately, the number of PCs available in the region is extremely low. Our government’s tax policies are pushing the cost of PCs higher and higher, taking these out of the reach of the average rural customer.

Then there is the issue of lack of infrastructure – many of the villages and towns in the rural areas lack proper communications networks and even suffer from limited power connections. Even if a rural centre has the power and communications infrastructure required, they suffer from around 18 hours of load shedding. How can a person living in a rural centre use the Internet or even turn on a computer if 75% of the time they don’t have access to electricity?

Do you have an estimate what percentage of the rural communities have access to broadband internet?

The penetration of broadband access is extremely low at the moment. Only 2-3 percent of rural population has access to broadband internet currently.

Is there policy in place that is going to encourage this kind of development of deploying broadband in rural areas?

As mentioned earlier, we are working very closely with PTA and USF in enabling broadband provision in these areas. The policies laid out by the government are business friendly and PTA is offering subsidies on connections through the USF Fund for incurring the huge costs for setting up a network in those areas. These subsidies are also being passed onto the end customer. In the USF regions, you can get a broadband connection for as low as Rs. 299.

Is there even a need for broadband in the rural sector?

More than half of Pakistan’s population lives in rural areas. The introduction of broadband would be consequently be more welcome in rural areas than it is in urban areas because the appreciation for something new would be much higher where no such thing exists.

We cannot discount the power of the internet as a medium for connecting people – not only with one another but with the world at large. The value of the communications tools in remote rural areas cannot be overstated. The introduction of broadband in rural areas will have a positive knock-on effect on the country’s development as a whole.

Any ideas on what kinds of rural ebusinesses can seem to work in Pakistan?

We have seen that mobile banking is on the rise and m-commerce has opened new possibilities for people in those areas. Similarly, with broadband access, we can enable people to conduct their businesses from remote locations.

One of the ebusiness ideas that I think might work is e-farming – using e-commerce websites to supply directly to wholesalers and retailers in the city. Also, the Internet could be used to set up virtual schools and training facilities.

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