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Today's Paper | November 15, 2024

Updated 21 Aug, 2024 08:04am

Situationer: The ‘sunk cost’ of doing e-business

NAVEED Qamar runs an online company, which works on resource augmentation models in the media industry. His company has been hired by foreign service providers, who take on business clients and outsource their work to Pakistan.

On August 14, he shared a client’s email on his Facebook profile, in which he was told that his services were no longer required. The reason: delays in delivering edited videos and digital content.

Talking to Dawn, Mr Qamar said his job requires downloading terabytes of raw videos, which are shot on cinematic cameras. These files require high-speed internet and a stable connection to download.

“Generally, you put your data on download and go to sleep. Over­night, the data is usually downloaded,” he told Dawn, adding that his team hadn’t been able to do this since August 1 due to issues with internet speeds and connectivity.

No line of work that relies on the internet has been immune to recent disruptions and outages

He tried three different internet service providers and tried working from different locations, but nothing helped. According to Mr Qamar, he sent emails to ISPs, but it was “hopeless”.

Even before the recent disruptions, Pakistan was among the countries with the slowest internet speed. According to Ookla, which tracks the performance and quality of inter­net connections, Pakistan ranks 145 among 162 nations with a median download speed of 15.39mbps on fixed broadband connections and 101 out of 111 nations with 19.07mbps on mobile broadband.

Owais Astori is an e-commerce entrepreneur and one of many people in Pakistan who run an online business.

The owner of a clothing store, he told Dawn that the recent internet disruptions were “crippling” online businesses, as everything from order processing to customer communication had been impacted.

He lamented that influencers and industry bodies have largely been silent on the issue, even as people continue to suffer.

The Pakistan Software Houses Association (P@SHA) and Pakistan Freelancers Association have both issued statements and urged the government to restore internet connectivity and be transparent in communication with the industry about the issues.

What’s up with WhatsApp

The disruption in WhatsApp services had a much bigger impact for two reasons: it is used by around 50m Pakistanis, and with fixed broadband connections still out of reach for almost half of the country’s population, many use cheap mobile data for communication on WhatsApp.

E-commerce businesses also rely on WhatsApp for customer service.

Downdetector, a website that provides real-time information about internet outages, received an unusually high number of complaints about disruptions in WhatsApp services from Pakistan over the past few weeks.

In response to a query, a spokesperson for the platform said 20,000 reports were received between August 8 and 12, with most of them being about issues with sending voice messages, media and downloading on mobile data.

The complaints, most of them from Lahore, Karachi, and Islamabad, were made by broadband users of three major telcos: Zong, Jazz, and Telenor (now owned by PTCL).

Dawn reached out to Zong, Ufone and Jazz for comment on the issue, but received no response.

Irfan Ali, who runs Lahore-based tech company Xeven Solutions, told Dawn that online businesses use WhatsApp to communicate with clients and their teams.

“This communication includes data transfer. If we’re unable to communicate, it impacts our [performance]. The delivery rate of my company is down by 50 to 60pc due to communication issues,” he said.

Large businesses have the money to build their chat networks (also called chatbots), leaving them immune from WhatsApp distortions. But small- and medium-sized sellers and social media stores who rely on WhatsApp Business for their work are facing losses due to communication issues.

Ahmed Kamal’s company, Cequens, provides WhatsApp API infrastructure to businesses to streamline their customer service. He told Dawn that users who are connected to mobile data are facing issues in sharing data with service providers through chatbots.

These issues have also impacted people who work for online food delivery services, quick commerce stores and ride-hailing apps.

In a statement to Dawn, a Foodpanda spokesperson said internet disruptions posed “significant challenges” for their business.

“Due to sluggish connectivity, platform orders have been impacted, and delivery riders have struggled [to work] effectively to cater to our customer’s demands,” said Hassan Arshad, who is Foodpanda Pakistan’s Policy and Communi­cations director.

“Sustained degradation in internet quality will have a profound impact on our stakeholders’ earnings — particularly delivery riders.”

Financial cost

Whenever there’s disruption or throttling of the internet, experts attempt to estimate the economic loss due to the effect on business activities.

The NetBlocks Cost of Shutdown Tool estimates this cost by using indicators from the World Bank, International Telecommunication Union, Eurostat and US Census.

According to the tool, if WhatsApp remains throttled or partially shut for seven days in Pakistan, its financial impact would be over $29.54 million or Rs8.5bn.

In a statement earlier this week, P@SHA said the economy could lose up to $300 million due to internet disruptions.

Yet, the government has given no clarity or communicated to the industry as to how long these issues will persist, according to the representatives of tech companies whom Dawn spoke to.

Ali Ihsan, the senior vice chairman of P@SHA said the government’s lack of transparency around the firewall had “ignited a firestorm of distrust” among internet users and Pakistan’s global IT clients.

Mr Arshad of Foodpanda also urged the government to “support” online businesses by “minimising any disruption to the tech ecosystem”.

Even if that happens now, it’s uncertain whether online workers like Mr Qamar would get their clients back.

Published in Dawn, August 21st, 2024

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