ISLAMABAD:
The global Virtual Private Network (VPN) industry has experienced explosive growth in recent years, transforming from a niche enterprise tool into a mainstream consumer service. As of 2024, the market is valued at approximately $44-50 billion and is projected to reach $75-90 billion by 2027, driven by escalating concerns over online privacy, data security, and the rise of remote work.
A VPN is a software tool that makes it appear as if a computer or mobile phone is located in another country or at a different site, such as a corporate office. The shift to hybrid and remote work models, accelerated by the pandemic, has made VPNs essential for secure access to corporate networks.
Additionally, users seeking to bypass geo-restrictions on streaming content have contributed to the consumer VPN boom.
The VPN market is highly fragmented, with players ranging from established cybersecurity firms like NordVPN, ExpressVPN, and Surfshark to emerging providers offering specialised services. Free VPN services have proliferated, though they often raise concerns about data monetisation and security vulnerabilities.
However, the industry faces significant headwinds in countries like China, Russia, and Iran, which have implemented VPN bans or restrictions – forcing providers into a technological cat-and-mouse game. Moreover, questions about logging policies, jurisdiction, and the true anonymity of VPN services in other countries have sparked ongoing debate among security experts.
Drawing parallels, Pakistan’s VPN licensing framework represents a strategic miscalculation that could impact the country’s ambitious digital economy goals. As of July 2025, the Pakistan Telecommunication Authority (PTA) has registered eight VPN service providers, with only four receiving operational approval: PTCL, National Telecommunication Corporation (NTC), Alpha 3 Cubic (Steer Lucid), and Zettabyte (Crest VPN). This marks modest progress from April 2025’s three initial licences but leaves most VPN services used by Pakistani freelancers operating in regulatory limbo.
The registration process requires static IP addresses. There is no fee for basic registration, but a nominal charge applies for IP whitelisting when five or more addresses are involved. The PTA has mandated VPN registration for embassies, banks, IT firms, and freelancers, acknowledging their legitimate needs.
Yet, a fundamental concern remains. Industry analysts and VPN providers worry that licensing requirements may necessitate data collection and potential sharing with authorities, contradicting the strict no-log policies that define commercial VPN services.
While the full terms of the Class Licence for Data Services have not been publicly disclosed, the regulatory framework gives the PTA oversight powers that international providers view as incompatible with their privacy commitments.
The enforcement mechanisms also remain unclear and likely unworkable. Identifying VPN traffic requires sophisticated deep packet inspection, which VPN protocols continuously evolve to evade. The compliance burden falls unevenly, large corporations can navigate registration, while individual freelancers and startups face disproportionate hurdles.
The categorisation of “legitimate” versus “illegitimate” VPN usage is also unworkable in practice. Modern digital work is fluid and dynamic. A developer may need to access GitHub repositories, client systems, international payment platforms, and communication tools – some intermittently restricted in Pakistan. Distinguishing legitimate business use from circumvention becomes nearly impossible.
Moreover, the PTA lacks a state-of-the-art laboratory to audit the wide range of VPN tools available to the public. It is well known that Facebook used the Israeli VPN Onavo Protect to spy on rival Snapchat’s users by tracking detailed in-app activity on devices where the VPN was installed. Similarly, the Indian regime is known to use fake VPNs to target Pakistani government officials from time to time.
A strategically coherent approach would recognise VPNs as critical digital infrastructure rather than a security threat by default. Instead of blocking VPNs, the PTA could issue advisories on their responsible use while investing in domestic digital infrastructure that reduces the need for circumvention – by improving international bandwidth, reducing latency, and ensuring platform availability.
Pakistan competes with India, Bangladesh, and the Philippines in digital services. These countries offer similar labour cost advantages while maintaining unrestricted internet access. Every friction point Pakistan introduces, such as registration requirements, service disruptions, or connectivity uncertainty, tilts the competitive advantage toward rivals. The digital services market operates with low switching costs; clients dissatisfied with Pakistani providers can easily shift elsewhere.
With thousands of VPN services globally and hundreds of thousands of Pakistani users requiring VPN access for legitimate business needs, the PTA faces an uphill task in designing a functional policy for IT exporters, freelancers, and individuals – one that safeguards both national interests and citizens’ digital rights.
THE WRITER IS A CAMBRIDGE GRADUATE AND IS WORKING AS A STRATEGY CONSULTANT
