China, Pakistan sign agreement to route Internet traffic through Pakistan, generate $400 million revenue

In a groundbreaking development, Pakistan has solidified its position as a regional hub for digital connectivity through a strategic agreement with China.

Caretaker Federal Minister for IT & Telecommunication Dr Umar Saif announced four pivotal milestones achieved in collaboration with key industry players, marking a significant leap forward in Pakistan’s digital infrastructure.

The highlight of this agreement is the establishment of the ‘Pakistan Internet Exchange (PIE) powered by DE-CIX,’ the country’s first carrier-neutral Internet Exchange (IX) in Islamabad.

This collaboration with DE-CIX, the world’s leading IX operator, positions Pakistan to become a central point for regional connectivity, potentially generating substantial revenue from internet transit traffic.

One of the key achievements is the agreement with China, allowing Pakistan to route internet traffic through the country. Dr. Umar Saif emphasized the transformative impact of this collaboration, stating, “Pakistan is a massive digital market, with an internet user-base larger than the population of Italy.” The partnership aims to make Pakistan a hub for regional connectivity, offering low-latency interconnection and the localization of global content.

The agreement also includes the establishment of Pakistan’s first carrier-neutral Internet Exchange Point (IXP) and data center by Etisalat. PTCL, in collaboration with DE CIX, will operate this new data center, facilitating the provision of super-scaling cloud services such as AWS, Google Cloud, and Azure within Pakistan. Additionally, this data center will serve as a local content hub for popular platforms like YouTube, TikTok, and Netflix.

Zarrar Hasham Khan, Group Chief Business Solutions Officer at PTCL & Ufone 4G, expressed enthusiasm about the collaboration, stating, “As the largest integrated ICT company in Pakistan, we are committed to advancing the country’s digital infrastructure to support widespread digitalization.”

The Pakistan Internet Exchange, housed in the PTCL data center in Karachi and operated by DE-CIX, is expected to contribute significantly to the country’s digital economy. With the potential to generate annual revenues ranging from $200-400 million through transit traffic, the initiative aims to enhance the internet experience for users and accelerate the growth of Pakistan’s digital ecosystem.