Pakistan disbands international call termination cartel

Posted on June 26, 2014  /  0 Comments

Pakistan observes its independence day on 14th of August. On 13th of August in 2012, the Ministry of Information Technology and Telecom (MoITT) issued a directive to establish “International Clearing House” or ICH. It allowed the international long distance carriers’ cartel to fix call termination rates at their whim. As a result, the hardworking Pakistani migrant workers were punished with excessive charges while calling home. This is how the robber barons of ICH were rewarded with illicit windfall at the eve of Pakistan’s 65th birth day.

Competition Commission of Pakistan (CCP) has vehemently opposed such unlawful decree. MoITT has, however, justified ICH to ensure additional revenues for the exchequer by clamping down on the grey market. Evidently it was a calculated bluff, as TeleGeography reports:

…. the ICH strategy increased revenues to LDI operators, but reduced the amount collected by the government. The Competition Commission of Pakistan (CCP) had noted in early 2013 that the implementation of the ICH had led to a 70% drop in international voice traffic and a 31% decrease in taxes, but a 308% increase in revenues for LDI operators.

TeleGeography also blames the then top leadership’s underhand dealings regarding ICH:

In a TV appearance, Siraj claimed that 14 long-distance and international (LDI) operators had pooled together a total of PKR800 million (USD7.39 million) that was then paid to former IT Secretary Farooq Awan as well as PM Raja Pervaiz Ashraf and president Asif Ali Zardari – both of whom have since left office – in order for the ICH to receive approval from the IT ministry. According to Siraj, in addition to the initial PKR800 million, the trio received bribes of between PKR100 million and PKR150 million per month.

Finally, responding to the recommendation of Pakistan Telecommunications Authority (PTA), the government has scrapped the infamous ICH. The Competition Commission of Pakistan has  welcomed the decision. ProPakistani news portal has reproduced the entire official order.

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