Digital Dreams Deferred: Pakistan’s Incomplete Transition to an Inclusive Online Future

Pakistan’s digital transformation stands at a decisive crossroads, captured comprehensively in the Asian Development Bank’s July 2025 diagnostic report developed with the Sustainable Development Policy Institute and contributions from international experts. The report paints a vivid picture of a country with high digital ambitions but hamstrung by systemic constraints, fragmented governance, and inconsistent policy implementation. Despite the passage of the Digital Nation Pakistan Act 2025, which established the Pakistan Digital Authority and the National Digital Commission, Pakistan’s digital ecosystem remains underdeveloped in critical areas such as infrastructure, service delivery, inclusion, and investment climate. The diagnosis is framed around four pillars: digital infrastructure, digital government, digital economy, and digital society, offering a sobering but hopeful roadmap.

Digital Infrastructure: Big Numbers, Low Impact

Pakistan’s telecom sector boasts over 190 million subscribers and more than 142 million broadband users. However, the numbers mask deep deficiencies. Fixed broadband penetration stands at just 1.3%, and only 14.8% of cell towers are fiber-connected. A meager 0.68% of households are connected through fiber-to-the-home (FTTH), well below regional peers like Vietnam and Malaysia. Mobile broadband is the primary source of internet access for most Pakistanis, but spectrum auctions have consistently failed due to prohibitively high base prices pegged to the U.S. dollar. The average revenue per user (ARPU) is only $0.80, among the world’s lowest, which limits telecom operators’ capacity to invest in network upgrades and discourages global players, evidenced by Telenor’s recent exit from the market.

The result is an overburdened, underperforming infrastructure grid, especially in rural and semi-urban areas. Investment flows have plummeted; foreign direct investment in digital infrastructure dropped from $1.67 billion in 2021–22 to just $750 million in 2022–23. The Universal Service Fund (USF), meant to bridge the viability gap in remote areas, is underutilized due to bureaucratic delays and limited coordination with provincial governments. Despite the rising appetite for digital data, data consumption has increased fivefold in five years, the necessary upgrades to telecom backbones and data centers lag behind.

Digital Government: Ambitions Outpaced by Reality

In the public sector, digital transformation efforts are scattered and largely unsynchronized. While 41 federal ministries have adopted E-Office platforms, there is no consistent user experience, and back-end systems remain fragmented. The National Database and Registration Authority (NADRA), which holds critical citizen identity information, lacks integration with key ministries, limiting its use in service delivery. Pakistan ranks 136th out of 193 countries in the UN’s 2024 E-Government Development Index, a clear indication of the structural and human capital challenges in the public sector.

Provincial progress varies widely. Punjab’s IT Board has made advances in data centers and service portals, while other provinces like Balochistan and Khyber Pakhtunkhwa struggle with basic infrastructure. There are no comprehensive frameworks for data governance, and cybersecurity efforts remain focused more on national security than civilian digital resilience. Public financial systems, especially in revenue collection and service delivery, are still largely manual. Without real-time data integration, planning and monitoring remain inefficient, and citizens continue to face bureaucratic red tape even for basic services.

A Fragile Digital Economy with Islands of Promise

Pakistan’s digital economy shows sparks of potential, but structural fragmentation keeps it from becoming a serious engine of national growth. E-commerce spending is a modest $10.5 billion, just a fraction of India’s $115 billion. Point-of-sale deployment remains limited at 109,000 nationwide. Digital financial inclusion is hampered by overreliance on cash-on-delivery, poor financial literacy, and limited digital trust. While 3.1 million students are enrolled in tertiary education, only 12% of the eligible age group attends university, compared to a regional average of 25%.

Pakistan’s $2.6 billion in tech exports for 2022–23 are dwarfed by India’s $194 billion. Startup investment, once a bright spot, has dried up amid global economic tightening and a lack of local follow-through. The country ranks 125th out of 166 on the UNCTAD Frontier Technologies Readiness Index. Though local manufacturing of smartphones has grown since the Mobile Device Manufacturing Policy 2020, most devices are still basic 2G models, limiting their utility in a digital economy. Despite having the talent and tools, Pakistan struggles to build continuity across digital policies and to interconnect various efforts into a coherent, large-scale transformation.

Society Online: Connected but Divided

Pakistan’s digital society is fragmented across gender, geography, and trust lines. Women remain particularly disadvantaged: only 53% own mobile phones compared to 86% of men, and just 33% have mobile internet access. Cultural norms, safety concerns, and affordability widen this digital gender divide, especially in rural areas. Internet access also varies sharply by region, with rural populations facing poor service and higher device costs. Language barriers and lack of digital literacy compound exclusion, making digital services unusable for large swaths of the population.

On the social front, digital platforms have become double-edged swords. While social media has amplified civic engagement and provided a platform for activism, it has also exacerbated misinformation, political polarization, and harassment. Laws like the Prevention of Electronic Crimes Act have led to increased surveillance and censorship, raising concerns among digital rights organizations. Cybersecurity remains weak, with frequent reports of data breaches and little public awareness or state-level response. The report also warns that without better digital literacy and online safety awareness, citizens’ trust in digital tools may erode further.

A Call for Coherent, Courageous Action

The ADB’s report does not mince words in its call for urgent reforms. It recommends rationalizing taxes and spectrum pricing, ensuring affordable access to digital devices, and expanding the USF to support demand-generation initiatives. It urges investment in public–private infrastructure partnerships, the creation of open-access fiber networks, and meaningful provincial coordination on digital transformation plans. A strong push is needed in cybersecurity, data governance, and inclusive literacy programs, especially for women and youth.

Pakistan is at a tipping point. With strategic alignment and sustained investment, it can unlock a digital future that fuels economic growth, reduces inequality, and strengthens governance. Without it, the country risks seeing digital transformation become another missed development opportunity.