This is the letter that we’ve sent to the Minister for IT on reducing international call charges to Pakistan:
Ms. Anusha Rahman Ahmad Khan
Minister of State for Information Technology
Ministry of IT
Government of Pakistan
Islamabad
Subject: Corruption and Cartelization under International Clearing House (ICH)
Dear Ms. Khan,
Competition Commission of Pakistan (CCP) has concluded in its Order dated 30 April 2013 that Long Distance International (LDI) operators have colluded with the Ministry of IT (MOIT) to get the ICH Policy Directive dated 13 August 2012 issued.
2. According to insiders, LDIs have allegedly paid huge kickbacks in range of Rs. 600 to Rs. 800 million to the previous Government stalwarts, including the then Minister Incharge for IT, the Secretary IT and other MOIT officials to get the controversial Policy Directive issued that has resulted in the following:
i. reversing Telecom De-regulation Policy of Government of Pakistan approved by the Cabinet in 2003 with the sole objective to bring investment and competition in the sector for benefit of the consumers.
ii. established monopoly of PTCL on international incoming calls, thus giving lucrative revenues to the operator to kill competition in other sectors including broadband by providing cross subsidies.
iii. loss of millions of dollars to national exchequer, USF contribution and access promotion contribution (APC) to local loop operators. As per CCP’s Order, the amount of APC has decreased from US$ 24.33 million to US$ 16.78 million (decrease of 31%) from September 2012 to February 2013 and the recurring loss still continues.
iv. increased the calling rates to Pakistan manifolds, thus making is miserable for overseas Pakistanis who earnestly contribute more than 50% of country’s total export earnings.
v. brought embarrassment to Pakistan at international level after Federal Communication Commission (FCC), USA, has ordered on 15 March 2013 to US telecom operators to make payments to Pakistani LDIs on pre-ICH rates.
vi. drastic decrease in incoming traffic to Pakistan, from 2,200 million minutes in August 2012 to less than 600 million minutes in February 2013, as per PTA’s official statistics presented to CCP. The downward trend in incoming traffic still continues.
vii. opening the floods of grey traffic in Pakistan as country is loosing more than 1,600 million minutes every month since October 2012, or a total of 14,400 million minutes lost to grey traffic, thus loosing huge revenues. Before September 2012, there was hardly any grey traffic to Pakistan.
viii. windfall increase in revenues of LDI operators who have been defaulting Rs. 33 billion on accounts of PTA and USF contributions. This has created a highly unlevelled playing field vis-à-vis operators who do not own any amount to Government of Pakistan. These LDIs are using ICH revenues to cross subsidize other services where they are in competition with other operators, thus distorting the market, encouraging corruption and back door entries.
ix. no increase in forex reserves of Pakistan as almost all large LDIs are foreign owned and telecom operators in 2012-13 have repatriated a record US$ 391 million according to State Bank of Pakistan’s recent reports.
x. misleading the Government officials on establishing a central monitoring system for international calls. Such a monitoring system was never required as all operators have already invested huge funds in providing lawful intercept to intelligence agencies. Central monitoring system buzzword was infact used as smoke screen to paint ICH Policy Directive as ‘national security’ instrument. No mention was however made to outgoing international traffic which would have been equally important as incoming traffic, if aspect of ‘national security’ was at all to be considered.
3. PTA in November 2011 has opposed the creation of ICH on some of the grounds mentioned above. It is interesting to note that the then Secretary MOIT, Mr. Farooq Awan, who was instrumental in getting the ICH Policy Directive issued was appointed as Chairman PTA and under his chairmanship, PTA backtracked from its earlier decision of opposing the ICH and implemented ICH Policy Directive.
4. In view of above, it is very clear that ICH Policy Directive was issued by the previous Government using corrupt practices, non-transparent process, without carrying out consultations with stakeholders including local loop operators and with collusion of LDIs for sole benefit of PTCL and other foreign owned LDIs. The country has lost millions of dollars on costly foreign exchange while robbing of overseas Pakistanis continues.
5. We therefore request you to kindly order immediate with drawl of ICH Policy Directive to bring this corruption to an end and order a high level inquiry to bring culprits to the justice who have brought a huge loss to Government exchequer since September 2012.
With kind regards.
Yours sincerely,
Wahaj us Siraj
Chief Executive Officer
Nayatel Pvt Ltd.
c.c.
Mr. Muhammad Ijaz
Secretary
Ministry of IT
Government of Pakistan
Islamabad
From: pakgrid@yahoogroups.com [mailto:pakgrid@yahoogroups.com] On Behalf Of Wahaj us Siraj/MGMT
Sent: Wednesday, May 01, 2013 3:58 PM
To: pakgrid@yahoogroups.com
Subject: [pakgrid] ICH arrangement held as null and void by CCP Penalty of 7.5% of annual turn over imposed on each LDI
ICH Agreement, commonly referred as Increase in International Calling Rates to Pakistan, finally axed by CCP, and multi billion rupees penalties imposed on PTCL and LDIs.
The battle is not over yet, as the cartels would take the decision again to superior courts. But this decision is historic for rule of law and big blow to corrupt practices in Pakistani telecom industry.
It’s interesting to note that only two midsize Pakistani telecom operators, BrainTel and NayaTel stood up against the controversial agreement and fought the battle in courts and CCP since October last year.
The decreased international incoming, traffic, 70% of the total, has been shifted to grey market, thus robbing the country of the previous foreign exchange revenue and poor quality calls for the consumers.
Kind regards….Wahaj
ICH arrangement held as null and void by CCP Penalty of 7.5% of annual turn over imposed on each LDI
ISLAMABAD (SPECIAL REPORT )
A Bench of the Competition Commission of Pakistan (CCP) comprising Chairperson Ms. Rahat Kaunain Hassan, Member Dr. Joseph Wilson and Member Shehzad Ansar in the order passed on 30-05-13 has annulled the International Clearing House (ICH) Agreement entered into among all (14) the LDI operators and has imposed a penalty of 7.5% of annual turn over of each LDI for violation of 4 of the Competition Act, 2010 (the ‘Act’).
The penalty runs into several billion of rupees as only the penalty of PKR PKR 8.309 billion, 534 Million and 189 million has been imposed on PTCL, Worldcall and Telecard respectively.
The Bench ref! erred to the data furnished by PTA which shows that the volume of incoming calls as on September 2012 before the ICH Agreement was 1.9 Billion minutes, which decreased to 579 million minutes in Feb-13 after the establishment of ICH.
It has been observed by the Bench, referring to PTA’s data, that the estimated revenue of LDI Operators for the month of September 2012 before the ICH arrangement were US$ 8.37 million, which post ICH, has increased to US$ 59 million in the month of October 2012 and currently stands as US$ 34 Million in the month of February 2013. Despite reduction in the incoming traffic by 70% after the establishment of ICH, the revenue of LDI’s increased by 308% in Post ICH period. The main reason behind increase in Revenue of LDI’s is that ASR now has been taken as to 8.8 cents/minutes from rates around 2 cents/min! ute pre ICH. The order states that the monthly APC received/ receivabl e by the PTA, has decreased from $ 24.33 million to $ 16.78 million in the month of
February 2013 (Decrease of 31%).
The Bench held that the facts and figures available highlight the pernicious nature of the ICH arrangement, its harmful effects on the telecom sector, consumers and the economy in general which must be condemned and cannot be condoned at any cost.
The order states that the ICH Arrangement reduces choice, forecloses the market, removes incentive for better quality of service, removes incentives for investments in improvement of infrastructure, reduces the size of the market and market players, confers anti-competitive advantages and becomes a clear threat to consumer welfare in total negation of spirit of T! elecom De-regulation Policy, 2003 apart from the provisions of the Competition Act. In fact, ICH Agreement squanders any gains that we have made in the telecom sector till now – gains that have accrued precisely because of a focus on competition.
LDI Operators have been directed to cease and desist from carrying such prohibited practices and not to enter into any other agreement of similar nature having object or effect of restricting competition and PTA has been advised to ensure restoration of competition amongst the LDI Operators as it existed prior to implementation of the ICH Agreement.
For failure to comply with the earlier order passed by the Commission requiring the LDI operators to seek clearance! if at any point of time they intend to enter into ICH arrangeme nt, a penalty of PKR 1,000,000 (one million) has been imposed on all the LDI Operators . The order also provide that for any loss resulting from illegal gains received by LDI Operations under the ICH Agreement, the aggrieved parties can claim compensation from the LDI Operators before the Court of competent jurisdiction in pursuance of this Order.
According to the order of CCP, the LDI operators by entering into the ICH Agreement have colluded to fix prices of international incoming telephony, close down competing networks and divide revenues among themselves without any competition. This behaviour amounts to hard core cartelization which is strictly prohibited under Section 4 of the Act and is the most pernicious anti-competitive activity possible. Through this cartelization, the LDI operators have not only eliminated competition in the market for ! international incoming telephony but have also made it impossible for new entrants to enter the market and pose any competitive pressure.
During the proceedings the LDI operators pleaded before CCP that they entered into the ICH Agreement on the directives of the Ministry of Information Technology (MOIT) and PTA. However, in view of the settled principle of law that a policy directive cannot override or prevail an express provisions of the statute passed by the legislature, the Bench held that no protection or immunity can be sought from the application of the Competition Act by the undertakings under the umbrella of such a policy directive.
http://www.telecoalert.com/?p=3761
| Reply via web post | Reply to sender | Reply to group | Start a New Topic | Messages in this topic (3) |
No comments:
Post a Comment