ICH abolish directive effective from 1st. August 2014,


After successful introduction of Next Generation Mobile Services in Pakistan through a transparent auction process, Ministry of IT has taken another major policy initiative to encourage and promote competition amongst telecom service providers in spirit of the De-regulation Policy. Ministry of Information Technology has issued a directive to the Pakistan Telecommunication Authority (PTA) to discontinue the International Clearing House (ICH) regime established through an earlier directive to substantially deregulate the international incoming traffic terminating on Pakistani networks. This directive of the MoIT will be effective from 1st of August 2014 giving sufficient time to Long Distance International (LDI) operators for discharging their commitments under the prevalent ICH arrangement.

Ministry of IT had issued an ICH Policy Directive earlier on 13thAugust, 2012, to restructure the way international telecom traffic is terminated into Pakistan.The ICH policy mandated routing of all incoming traffic through a single gateway operated by PTCL as the head of the LDI ICH consortium.However, the policy did not achieve its objectives as it led to exponential increase in call rates for oversees Pakistanis and high volumes of Grey Traffic.This significant increase in international calling rates to Pakistan caused serious concerns among overseas Pakistanis.Due to this increase, net incoming calls were also reduced substantially and were converted either to Over-the-Top services or to grey and illegal channels, which bypass legitimate, licensed gateway. Although collection of APC for USF increased through ICH arrangement as compared to previous regime set by the De-regulation Policy 2003, the Government decided to take a very bold step and in this process take a significant financial hit in terms of revenues generated through this mechanism. This was done in the larger national interest, particularly to provide relief to expatriate Pakistanis and to eliminate the menace of Grey Traffic which was beginning to contaminate the entire sector. The Competition Commission of Pakistan had already declared the ICH arrangement to be anti-competitive and violative of the Competition Act, 2010.

The decision to discontinue the ICH arrangement was taken after thorough and extended deliberations. A key ingredient of the revised directive is to put APC on zero for the time being in order to ensure complete deregulated environment around international incoming telephony.

The Minister for IT & Telecom, Mrs. Anusha Rahman Khan, in her policy statement highlighted the major expected benefits, which are being anticipated from the revocation of ICH policy and stated that it will end the menace of grey traffic, make calls cheap by 6 to 8 rupees for oversees Pakistanis and will promote a healthy competition in the telecommunication sector. More importantly, she stated that the government had decided to take significant financial hit purely in public interest and this also signifies a huge step forward towards eradicating the menace of grey traffic. It was obviously a very bold step taken by Ministry of IT and PTA in an attempt to clean the sector from ills that emanated from the policy implemented by the previous government. After 3G/4G, this was yet another challenge for Ministry of IT that has Alhamdulillah been met today in the form of reviewed international traffic policy under the guidance, leadership and directions of the Prime Minister Nawaz Sharif and Finance Minister, who was also the Chairman of the Steering Committee for Grey Traffic Monitoring and Control.

(1) Click Here For Policy Directive Details

(2) Click Here For PTA Report Details

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