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2 Pakistan's IT industry takes
off By Syed Fazl-e-Haider
QUETTA, Pakistan - Information technology
is the fastest-growing industry in Pakistan.
Starting from a relatively low base in 2003, the
South Asian country's IT sector has developed into
a US$2 billion market.
The rapid growth of
the sector is largely due to foreign IT firms
setting up operations in Pakistan in a bid to
reduce costs and raise profits. Moreover,
Pakistan's efforts to establish a reliable IT
infrastructure and the attractive incentives it
offers to foreign investors have been instrumental
in the development of the local IT
industry. Many foreign IT
firms have enjoyed great success in Pakistan.
Some of the areas in which the Pakistani
government has provided benefits to the IT
companies include: tax exemption until 2016, seven
years' tax holiday for venture-capital funds,
provision of funds for software companies to get
ISO-9000 and CMM-level certification, 100%
ownership of equity for foreign investors and the
development of low-rent IT parks, fiber-optic
connectivity, libraries and conference rooms. It
is because of these incentives that an increasing
number of foreign IT companies have chosen
Pakistan for their outsourcing operations. At
present the US, Canada and Europe are the major
destinations for the export of Pakistani
IT-enabled services.
The Ministry of
Information Technology has set a $1 billion export
target for IT-enabled services by 2010 and asked
China to construct IT parks in Islamabad, Lahore
and Karachi on a build, operate and transfer (BOT)
basis.
Data from Pakistan's central bank
show that the country managed to export more than
$72 million worth of software during financial
year 2005-06. Pakistan's software exports touched
$72 million in fiscal year 2005-06, a record 56%
increase compared with exports of $46 million in
fiscal year 2004-05.
According to a report
by the Pakistan Software Export Board (PSEB), the
top five companies that have contributed the most
to the IT sector are Nestsol Technologies, Ovex
Technologies, TRG Private Ltd, Systems Private
Ltd, and Elixir Technologies.
NetSol
Technologies NetSol Technologies Inc is a
multinational provider of enterprise software and
services for the commercial finance industry.
Headquartered in Calabasas, California, the
company operates on a global basis with locations
in the US, Europe, East Asia and the Asia-Pacific
region. By using its worldwide resources, NetSol
delivers high-quality, cost-effective IT services
ranging from consulting and application
development to systems integration and
outsourcing.
NetSol Technologies Ltd,
Pakistan, has registered 129% growth to Rs222.5
million ($5.2 million) during the second quarter
of 2006-07 (October-December) compared with
Rs97.12 million for the corresponding period last
year. The company's gross profit also increased by
201% to Rs129.9 million in October-December 2006
against Rs43.08 million in the same period of
2005. Many business deals came to fruition for the
company during this period.
NetSol
Technologies recently secured three prestigious
awards in the annual Pakistan Software Houses
Association ICT (information and communication
technology) awards ceremony, which include Best
IT/ITES Employer Award, Best E-Government and
Services (Electronic Credit Information Bureau)
Award and Best Revenue Growth Award.
NetSol has played an instrumental role in
making Pakistan an inviting opportunity for
foreign direct investment. By August 2004, NetSol
had invested more than $10 million in the IT
sector in Pakistan. The government has recognized
its efforts in spearheading the country's IT
growth, part of Pakistan's global
multibillion-dollar foreign-investment program.
The company commenced operations in
Pakistan in 1996 and has evolved into a global
provider of enterprise solutions and IT services,
offering multiple products and services to a
premier client base in the commercial finance
industry. The company offers customized
application development, software products and
consulting services. In addition, NetSol develops
outsourced applications in collaboration with
clients and partners. The company received the
Federation of Pakistan Chambers of Commerce and
Industry Best Export Performance Award for the IT
services sector for the period of July 2005 to
June 2006.
NetSol has recently been
awarded a contract by the government of Pakistan
under which it is to design, develop and deploy a
customized software solution for the automation of
all official and administrative activities for the
Prime Minister Secretariat. NetSol's first project
enabled members of the National Assembly and the
Senate to access information on the working of the
house, debates, questions, bills, session
proceedings and other legislative activities at
their offices and official workplaces.
NetSol announced on February 26 that it
had secured its fourth major contract for
LeaseSoft in the Chinese market in the past 12
months. The consumer finance operation of a global
automotive manufacturer is the latest customer to
purchase the company's flagship vehicle portfolio
management system. It plans to deploy LeaseSoft in
the launch of its vehicle-financing operations in
China this year.
The contract, valued at
more than $1.5 million, includes license,
customization and maintenance fees. Under the
terms of the agreement, the customer is purchasing
LeaseSoft Retail Finance software with three
application modules - credit application
processing, contract management and wholesale
finance, as well as receiving full software
customization, system implementation, and ongoing
maintenance and support services for the product.
Ovex Global Established in
January 2003, Ovex Technologies is now a
subsidiary of the US-based firm, En Pointe
Technologies. It is a third-party offshore
business process outsourcing (BPO) provider. Last
October, 70% of the equity of Ovex Group (Ovex US
and Ovex Pakistan combined) was acquired by its
longtime client, En Pointe Technologies. This was
the first acquisition made by a US publicly traded
company in Pakistan. The deal was worth $1.68
million.
Ovex Technologies (Private) Ltd
has provided offshore services to En Pointe and
other customers since 2003, while a related
company that was formed in July 2005, Ovex
Pakistan (Private) Ltd, serves the Pakistani
market. The two companies, collectively known as
Ovex, employ more than 700 staff members. It
provides
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