The State Bank of Pakistan suspended the payment of $34 million to international service providers on December 1, 2022; mobile users will no longer be able to get Google Play Store services.
The central bank suspended the direct carrier billing (DCB) system, which halted the annual payment of $34 million to overseas service providers, like Google, Amazon, and Meta, via mobile firms.
Customers in Pakistan will now be required to download Google and other overseas apps to make payments using only credit cards or debit cards. However, the credit card option is restricted to a limited number of clients, preventing most mobile users from downloading programs from the Google Play Store.
The Ministry of Information Technology and Telecommunication, Pakistan Telecommunication Authority (PTA), and four mobile cellular operators (CMOs) wrote a joint letter to the SBP requesting that its decision to revoke the DCB mechanism for payment of dollar fee be reversed in light of the country’s liquidity crisis.
The News has established with authoritative sources that Google services, such as app downloads, will be inaccessible. In addition, they informed the appropriate authorities that a $34 million payment was overdue and that their Google App Store download services would be discontinued if the balance was not settled.
The four mobile carriers submitted a unified letter to the government claiming that the telecom industry is one of the largest donors to foreign direct investment, in addition to making considerable contributions in the form of taxes, tariffs, and other levies.
The significance of the telecom industry in advancing the Digital Pakistan agenda cannot be overlooked. The digital transformation of Pakistan is designed to benefit all social and economic sectors, necessitating the participation and facilitation of all players.
Several months ago, the State Bank of Pakistan removed the IT designation of telecom carriers. It was also suggested that instances be routed to SBP on a case-by-case basis for approval. As a result, the mobile operators reported facing significant delays in receiving approvals, resulting in disruptions to mission-critical services as they support the company in managing IT and digital infrastructure to meet all operational requirements internally and in servicing its customers with billing management, fraud management software, Office 365, robotics automation software, and software developers, in addition to payments related to digital advertising on large IT platforms.
Pakistan’s digital economy relies heavily on international service providers for hosting on cloud platforms, licensing required for services/platforms, security measures, and, in many cases, technical competence to train the local workforce to international standards.
All the major players, including Google, Amazon, and Meta, are impacted by non-payment and are most likely to cease operations. As a result, Telecom and internet customers will be unable to meet their demands through digital platforms such as digital banking, e-Commerce, e-Education, and e-Health, which employ cloud infrastructure and acquire licenses for both applications and web-based platforms.
The lack of distribution support and interest from industry players such as Google, Amazon, and Apple, representing Facebook, will make the distribution and monetization of digital platforms exceedingly difficult. In addition, digital marketing is the most effective channel for all brands, products, and services; as a result, brands, products, and services beyond the digital arena will be affected.
In this age of social media, any potential interruption of such digital services due to non-payment would cause a great deal of negative publicity for Pakistan and should be avoided at all costs, according to the letter.
The letter concluded, “It is important to note that we all recognize the current challenge of deteriorating economic conditions in the country and are therefore open to working amicably with the Regulator (SBP), as we are already doing in the case of the telecom sector import-related transactions to navigate through these trying times.”