1. PRESENTED BY PAKISTAN SOFTWARE EXPORT BOARD (PSEB) PAKISTAN’S IT INDUSTRY PROFILE & STRATEGY

3. GLOBAL IT INDUSTRY OVERVIEW “ Since the technology bubble burst in 2000 growth in IT Services, which picked back up in 2003, has remained robust with higher growth in the Offshore Outsourcing component“

4. GLOBAL IT SERVICES INDUSTRY OVERVIEW IT INDUSTRY GROWTH 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 2004 2005 2006 2007 2008 2009 2010 Trillions Source: “IDC Press Release” 10 th Jan. 2007 6.3 1.481 2010 6.3 1.394 2009 6.3 1.312 2008 6.3 1.238 2007 5.6 1.165 2006 5.6 1.103 2005 5.6 1.045 2004 Rate Growth (US $ Tril.) Year IT INDUSTRY GROWTH

5. GLOBAL IT INDUSTRY OVERVIEW SERVICES GROWTH IT SW & Services ITES Source: “Worldwide and US BPO” 2004-08-IDC 2004 “Bearing Point Report” 2005 0 100 200 300 400 500 600 700 800 900 Billions 2004 2005 2006 2007 2008 2009 2010

6. GLOBAL IT INDUSTRY OVERVIEW GLOBAL IT OUTSOURCING 0 20 40 60 80 100 120 140 2004 2005 2006 2007 2008 2009 2010 Billions Source: “IDC-Global IT Economic Outlook” 2004

7. ITPS GLOBAL MARKET SIZE Total Global Spending Total Outsource able Actually being 0ffshored US $ 1.045 Trillion US$ 280 Billion US$ 40 Billion Source: “Strategy for Increasing Exports of BPO” Bearing Point Report 2005

8. GLOBAL IT INDUSTRY OVERVIEW US IT OUTSOURCING SPENDING Source: “Worldwide and US IT Outsourcing Services” IDC Report 2004 U.S. IS Outsourcing Spending Share by Vertical Industry 0 2 4 6 8 10 12 14 16 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 % age Construction 16 Industries 15 Education 14 Wholesale 13 Insurance 12 Transport 11 Healthcare 10 Utilities 9 Services 8 Retail 7 Media 6 Processes 5 Finance 4 Government 3 Banking 2 Manufacturing 1

9. BPO SERVICES SHARE GLOBAL IT INDUSTRY OVERVIEW Source: “IDC-Market Opportunities by Horizontal Business Functions” 2004 11 682 614 554 497 447 405 375 Total 39 10 8 7 5 3 22 837 Training 7 38 35 33 31 29 27 26 Facility Operations and Management 6 183 176 168 158 147 136 126 Sales & Marketing 37 37 30 24 19 12 7 6 Engineering 12 288 255 226 200 182 166 155 Logistics 12 72 64 57 50 45 40 37 Customer Care 10 22 20 18 16 15 14 13 Finance & Accounting 34 6 4 3 2 2 1 1 Procurement 20 22 19 16 13 11 9 8 Human Resources 2003-2008 CAGR (%) 2008 $(M) 2007 $(M) 2006 $(M) 2005 $(M) 2004 $(M) 2003 $(M) 2002 $(M) KEY HORIZONTAL BUSINESS FUNCTIONS

10. GLOBAL IT INDUSTRY OVERVIEW BPO MARKET SHARE Source: “Gartner- Press Release” 2006

11. GLOBAL IT INDUSTRY OVERVIEW IT OUTSOURCING SUPPLIERS (USD 40 BILLION) 0.9 0.5 1.8 1.9 4.7 12.6 17.2 India Canada China Eastern Europe Philippines Mexico Others Source: “Strategy for Increasing Exports of BPO” Bearing Point Report 2005

12. PAKISTAN ECONOMIC SUCCESS STORY “ Pakistan’s economic resurgence is based on strong fundamentals and is receiving international acclaim… ”

17. PAKISTAN IT INDUSTRY PROFILE “ Starting from a relatively low base in 2003, the Pakistan IT Industry has experienced rapid growth over the last three years … ”

19. INTERNET CONNECTIVITY MAP Transworld Associates, 2006

20. IT COMPANIES BY LOCATION PAKISTAN IT INDUSTRY PROFILE Source: “PSEB National Census of IT Companies”, 2006 33% 954 TOTAL 1 13 Others 4 38 344 Karachi 3 28 290 Lahore 2 33 307 Islamabad/Rawalpindi 1 Percentage (%) Figure City S.No. Karachi 38% Other Cities 1% Lahore 28% Islamabad/Rawalpindi

21. CALL CENTERS STATISTICS PAKISTAN IT INDUSTRY PROFILE PSEB Registered Call Centers by city Call Centers Share in Total Revenue Source: “PSEB National Census 2006” “ Bearing Point Strategy for Increasing Exports of BPO” September 20, 2005 Call Center 26% IT and Software 60% Other ITeS 14% Islamabad/Rawalpindi “ 79” Karachi “ 131” Lahore “ 112” Other Cities “ 8”

22. PAKISTAN IT INDUSTRY PROFILE IT EXPORTS BY REGIONS Source: “SBP” Jul-Dec 2006 USA UK THAILAND UAE CANADA CHINA JAPAN HONGKONG GERMANY AUSTRALIA SINGAPORE OTHER USA 58% UK 9% Others 16% Thailand 4% UAE 3% Canada 2% China 2% Japan 2% Hong Kong 1% Germany 1% Australia 1% Singapore 1%

23. PAKISTAN IT INDUSTRY PROFILE GROWTH OF KEY COMPANIES Between 2003-06 these seven sample IT companies grew by over 400 % Source: “PSEB Survey” 2005

24. PAKISTAN IT INDUSTRY PROFILE TOP 10 EXPORTERS FY 05-06 Xavor Pakistan Pvt Ltd 10 Enterprise DB 9 Geopaq Tech. (Pvt.) 8 Trivor Software 7 Descon IT24 Pvt Ltd 6 Elixir Technologies 5 System Pvt Ltd 4 TRG Pvt Ltd 3 Ovex Technologies 2 Netsol Technologies 1 Rank Companies Pakistan (State Bank Figures) Source: “SBP”, “PSEB”, “Bearing Point Study” September 20, 2005

25. PAKISTAN IT INDUSTRY PROFILE MULTINATIONAL DEVELOPMENT CENTERS & PROJECTS

26. PAKISTAN IT INDUSTRY PROFILE MULTINATIONAL DEVELOPMENT CENTERS & PROJECTS

34. PAKISTAN IT INDUSTRY PROFILE EXPORT OF IT SERVICES Source: “Pakistan’s IT Revenue grossly understated” V1.4, PSEB, 31/08/2006 USD 1,050 million Grand Total USD 250 million (At least 5000 workers earning at least USD 50,000 per year on average) 4. Temporary Movement USD 450 million 3. Commercial Presence Abroad USD 200 million (Average USD 250,000 expenditure by over 800 entities) 2. Consumption Abroad USD 150 million 1. Cross Border IT Exports Mode

35. PAKISTAN IT INDUSTRY PROFILE LOCAL INDUSTRY REVENUE Source: “PSEB” and “Bearing Point” 2005-2006 USD 200 million IT Services Software and services, IT enabled services, (Other than sales to Multinationals, Multilaterals, and Foreign Missions) USD 150 million International Software Vendors USD 1,150 million Total Domestic IT Revenue USD 200 million Peripherals – 1/3 of Computer Sales USD 600 million PC/Laptops/Servers 1,000,000 new and used CPU@ USD 600 per CPU Revenue FY 05-06 Area

36. TOTAL INDUSTRY SIZE PAKISTAN IT INDUSTRY PROFILE Source: “Pakistan’s IT Revenue grossly understated” V1.4, PSEB, 31/08/2006 USD 2.2 Billion USD 1,150 Million USD 1,050 Million Total Industry Size Local IT Industry Revenue Export of IT Services

37. PAKISTAN IT INDUSTRY PROFILE COMPARISON WITH INDIA, 30 th June 2005 Source: 1. PSEB Study “Assessment of IT Professionals in Pakistan” – 2005 2. “PSEB Domestic Business Department” 3. “NASSCOM” 2006 4. “NASSCOM 2006” 5. “NASSCOM Strategic Review”, 2004, p 207 1:10.35 1:12.87 1:18 Ratio 6.21 GBS 5 965,250 4 USD 36 billion 3 India 600 MBS 2 75,000 1 USD 2 billion Pakistan Internet Bandwidth Usage IT Personnel Estimated Global IT Revenue Country

38. Pakistani labor is cheaper than India. Total Price in Market 0% 100-200% 100-200% 58,598 23,708 to 35,562 18,000 to 27,000 Source: The Buying Triangle, LLC, 2006 OPERATING COSTS IN US, INDIA & PAKISTAN US$ Cost per FTE (Full Time Employee) 42,927 6,179 4,500 8,571 1,000 800 1,500 2,328 2,000 2,600 847 700 3,000 1,500 1,000 58,598 11,854 9,000 Personnel G&A Expense Telecom Property Rentals Depreciation Total Expenses Markup USA India Pakistan

39. STRATEGIC FRAMEWORK “ While the Pakistan IT Industry has made impressive strides over the last three years, sustaining the growth will require sustained measures that are part of an integrated strategic framework …”

40. STRATEGIC FRAMEWORK INTERNATIONAL BEST PRACTICES & LESSONS LEARNT 1950 MANPOWER MARKETING 1990 DEVELOPMENT AND COMMUNICATION COSTS FALL BY SEVERAL ORDERS OF MAGNITUDE MAKING LARGE SCALE OFFSHORE IT ECONOMICALLY FEASABLE AND CAUSING DEMAND TO SURGE 1980 FUNDING MANAGEMENT 2000 MANPOWER 2003 MANAGEMENT 2000 SIZE, DOMAIN, TECHNOLOGY, COUNTRY IMAGE

41. IT & TELECOM INDUSTRY COMPARISON Intellectual Property Protection, Convergence, and Taxes & Tariff equal challenge Deregulation policy major challenge and success Public Policy Only VC Multiple sources Finance Quality major problem. Cost also problem n.a. Telecom Bandwidth High rents not affordable High rents affordable Office Space Small, Manpower intensive companies that cannot afford high priced manpower High Margin, Capital intensive business that can afford expensive manpower Human Capital International, Highly Competitive Under the Radar Screen Controlled, Domestic, Oligopolistic High Profile Market IT industry Telecom Industry Area

42. 0 10 20 30 40 50 60 70 80 90 Telecom Bandwidth IT enabled Office Space Human Capital Marketing/Country Image Availability of Finance Company Capability Development Public Policy Facilitation Strategy & Research Other IT INDUSTRY FEEDBACK IT Industry feedback was conducted with the collaboration of Top IT Companies in Islamabad, Lahore & Karachi. The scale of 0-90 shows the importance of the area of concern. The colored bars represent the areas of concern. Areas of Concern No. of Companies

43. STRATEGIC FRAMEWORK Direct Drivers: Office Space HR Marketing Telecommunications Bandwidth Indirect Drivers: Provide Reliable bandwidth of sufficient capacity in quick time Provide Quality IT-Oriented Office Space at affordable rates in sufficient quantities and in quick time Provide adequate quality manpower in sufficient quantities with acceptable attrition, in quick time Sustained dominance of niches; Bring development house or call centre of large technology or other MNC to Pakistan Research on the IT Industry Strategy & Research Strategy, Systems, Culture Internal Grease the wheels of private enterprise Facilitation Legislation that promotes and protects the IT industry Policy Employ certifications as a “rite of passage” Company Capability Development Promote innovation, rapid growth and support the Strategy Finance

54. PAKISTAN IT INDUSTRY PROFILE GROWTH PERCENTAGE 2003-2010

59. THANK YOU