ISLAMABAD: Pakistan’s telecommunication authority this week announced it has started granting licenses to virtual private network (VPN) service providers, saying the move would enable businesses to utilize their services for “lawful purposes” and ensure data security. 

Pakistan’s government last year cracked down on the use of VPNs, with the Pakistan Telecommunication Authority (PTA) asking businesses, freelancers and information technology (IT) companies to register their VPNs to ensure compliance with government regulations. It had warned that unregistered VPNs would be blocked. 

The government says its measures are meant to deter militants and other suspects who use VPNs to conceal their identities and spread “anti-state propaganda” and promote “blasphemous” or other illegal content online. Digital rights activists, however, say the government’s move against VPNs is an attempt to block vital tools that allow users to bypass restrictions in its bid to stifle criticism online. 

“The Pakistan Telecommunication Authority has initiated the licensing of Virtual Private Network (VPN) service providers under the Class License for the provision of data services in Pakistan,” the PTA said in a statement on Monday. 

The authority said it has approved the applications of two companies and granted them licenses to provide VPN services in the country. 

“This initiative enables businesses to utilize VPNs for lawful purposes, ensuring data security, privacy, and regulatory compliance while promoting transparency,” the PTA said. 

It encouraged VPN service providers to apply online for the Class License on the authority’s official website. 

Pakistan saw a sharp rise in the use of VPNs last year when the government banned social media platform X after allegations of rigging in general elections surfaced in February 2024. Pakistan’s election commission and the caretaker government that organized the polls reject the allegations. 

Rights activists say the government’s measures to regulate the use of VPNs are part of a wave of digital crackdowns, including its move to implement a nationwide firewall last year. 

The government said the firewall intended to block malicious content, protect government networks from attacks, and allow it to identify IP addresses associated with what the government described as “anti-state propaganda” and terror attacks.

The Pakistan Software Houses Association (P@SHA), the country’s top representative body for the IT sector, warned in November 2024 that Internet slowdowns and the restriction of VPN services could lead to financial losses and closures, and increase operational costs for the industry by up to $150 million annually.