Mobile customers won’t be able to get Google Play Store services starting on December 1, 2022, after the State Bank of Pakistan blocked the payment of $34 million to international service providers.
The payment of $34 million annually to overseas service providers like Google, Amazon, and Meta through mobile firms became stalled after the central bank stopped using the direct carrier billing (DCB) mechanism.
Customers in Pakistan will now be forced to download Google and other foreign apps in order to make purchases using credit cards or debit cards exclusively. However, because the credit card option is only available to a certain number of consumers, the majority of mobile users might not be able to download programs from the Google Play Store.
On Friday, the Pakistan Telecommunication Authority (PTA), the Ministry of Information Technology and Telecommunication, and four cellular mobile operators (CMOs) unanimously wrote a joint letter to the SBP asking it to reconsider its decision to revoke the DCB mechanism for payment of the dollar fee in light of the country’s current liquidity crisis.
The News received confirmation from reputable government sources that Google services like app downloads won’t be available. They informed the appropriate authorities that a $34 million payment was past due and that, if it was not paid, their services for Google App Store downloads would cease to be offered.
The four mobile operators sent a joint letter to the government, stating that the telecom industry is one of the biggest contributors to foreign direct investment along with other significant contributions in the form of tax, duties, and other levies.
The State Bank of Pakistan removed telecom providers’ IT designation months ago. Moreover, it was suggested that cases be sent to SBP individually for approval. As a result, the mobile operators complained that they were experiencing delays in obtaining approvals, which was causing a disruption in crucial services. These services include billing management, fraud management software, Office 365, robotics automation software, payments for software developers, and payments related to digital advertising on large IT platforms.
The hosting on cloud platforms, licensing needed for services/platforms, security measures, and in many cases, technical expertise to upskill the local workforce to reach international standards are all areas where Pakistan’s digital economy heavily depends on foreign service providers.
Due to non-payment, all of the big players, including Google, Amazon, and Meta, are suffering and are most likely to stop providing their services. The result will be that telecom and internet users won’t be able to satisfy their needs from digital platforms like digital banking, e-commerce, e-education, and e-health that use cloud infrastructure and require licenses for both applications and web-based platforms that are severely impacted.
The role of the telecom sector in expanding the agenda of Digital Pakistan cannot be ignored. Pakistan’s digital transformation is intended to benefit all social and economic sectors and thus needs engagement and facilitation from all stakeholders.
Given the lack of distribution support and interest from the market players like Google, Amazon, and Apple representing Facebook, selling digital platforms will become very difficult. As a result, companies, services, and goods beyond the digital sphere will be impacted. Digital marketing is currently the most effective channel for all businesses, products, and services.
“Any potential outage of such digital services due to non-payments would create a lot of negativity in the world about Pakistan in this age of social media and should be avoided at any cost,” stated the letter.
The letter concluded: “It is pertinent to mention here that we all understand the prevailing challenge of worsening economic conditions of the country and thus are open to working in an amicable way with the Regulator (SBP); as we are already working with them in case of the telecom sector imports related transactions to navigate through these testing times.”
