PTA And LDI Licensees do not fall within the purview of CCP. Moitt

ISLAMABAD (SPECIAL REPORT)
Policy Directive of the Ministry of Information Technology & Telecom and all ensuing steps taken by Pta and the LDI Licensees do not fall within the purview of the Competition Act 2010 or jurisdiction of the Competition Commission of Pakistan (CCP). This is stance of Moitt reports present Prime Minister Mian Mohd Nawaz Sharief regarding International Calling House system. Which was established by Ex Prime Minister Raja Pervaiz Ashraf as In charge Minister of Moitt. Mrs Anousha Rehman Khan present reports about ICH in Moitt take stance that ICH system will be continue and the CCP order in this regard is not bound on Moitt. Moitt take stance that the Competition Act, 2010 is limited in its scope to competition with in Pakistan and specially in respect of Section 4 thereof to fixation of price for services rendered toconsumers in Pakistan affecting a relevant market existing in Pakistan. Furthermore, by the very nature of its preamble, the Act of 2010 dose not pertain to services which may be rendered by undertaking in Pakistan to entities outside Pakistan and for which a price or fee is paid by the foreign entities, consequently being in the nature of export of services having  no effect or bearing whatsoever on the price of a product or services in Pakistan

Earlier The Competition Commission of Pakistan issue order against International Calling House in which CCP said that Having reviewed the provisions of LDI License and the Monitoring Regulations, we don’t see any justification for LDI Operators to close their switches and rely only on PTCL network to implement the ICH through ‘price fixing’ and ‘quota fixing’ a clear violation of the Competition Act; on the pretext of controlling grey traffic when an adequate mechanism was already in place. Even otherwise PTA being the regulator was rightly entrusted with the obligation of monitoring and the licensees could have contributed to upgrade/upkeep of existing set up. Nothing has been placed on record to substantiate that grey traffic has been reduced or controlled after the ICH arrangement. Instead as mentioned above huge reduction in the volume of incoming traffic may suggest otherwise or at least it is reflective of reduced economic activity in Pakistan. There is no doubt that termination rates for incoming international calls have been hiked Under the ICH Agreement. The argument that this burden has no impact on consumers in Pakistan is too naïve as its adverse impact on consumer results from a simple demand shift. PTA’ s data shows that the volume of incoming calls as on September 2012 before the ICH Agreement was 1,946 million minutes, which decreased to 579 million minutes in February 2013 after the establishment of ICH. In this regard we would also like to refer to the increase in outgoing traffic in comparison to incoming traffic in Pakistan. We note that there is a decrease in volume of incoming international calls and increase in outgoing traffic. Outgoing represented 9% of total international traffic which has increased to 24% after ICH which demonstrate the demand shift and the burden being passed on to consumers in Pakistan and also explains that price elasticity played a role in generating volumes/demand for consumers. Furthermore, demand shift may suggest either increase in grey traffic or is reflective of reduced economic activity in Pakistan. It is also negates the clearly laid down objective of “increase service choice for customers of telecommunication services at competitive and affordable rates” under the Telecom Deregulation Policy, 2003. The competition commission said in his order that the corner stone for the implementation of the ICH arrangement has been toprevent evasion of APC payment, recover its dues and to curb the grey traffic. Logically the higher the rates the greater the incentives for grey traffic. As for the monitoring part even in the pre-ICH the relevant telecom Rules and

Regulations and license itself clearly spell out the responsibility and the mechanism for monitoring. More detail about CCP order about ICH can see on CCP website,

http://www.cc.gov.pk/images/Downloads/ich_order_30_april_2013.pdf

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