Despite strong reservations of the Competition Commission of Pakistan (CCP) over the establishment of International Clearing House Exchange (ICH Exchange), Pakistan Telecommunication Authority (PTA) has issued Policy directive to Long Distance International (LDI) operators for setting up an ICH Exchange, it is learnt.
Sources told Business Recorder that LDI operators had agreed to abide by the notification of new rates in a meeting held on August 29 this year, while PTCL and LDI operators signed ICH Exchange agreement on August 30 in this regard. On the other hand, the CCP issued a warning to the PTA, the Ministry of Information and Technology (MoIT) and LDI for not taking any action and establishing an ICH Exchange, which was a violation of the Competition Act of 2010. CCP warned of stern legal action against all concerned in case the proposed ICH Exchange was set up.
According to the sources, the MoIT issued a policy directive on August 13 this year for the establishment of ICH Exchange. PTA, in a letter dated August 23, invited PTCL and LDI operators to sign an ICH agreement on August 29 so that the said policy directive could be implemented in letter and spirit.
During the meeting on August 29, which was chaired by Chairman PTA, PTCL was inquired about the signing of ICH exchange agreement on which PTCL apprised that negotiations with all LDIs had been completed and the agreement was expected to be signed on August 30. PTCL said that the delay in signing the agreement was because of comprehensive review of the agreement in line with the policy directive, as had already been pointed out in the letter dated August 28.
It was also inquired that how the industry intends to address the concerns of CCP regarding ICH Exchange. Member (Law), MoIT acknowledge that the ministry had received concerns from CCP on the establishment of ICH. The MoIT also confirmed that the CCP concerns would be tackled by the ministry itself since the CCP had directly conveyed its concerns.
Member (Law), MoIT, also expressed his concern regarding the delay in signing of the agreement by LDI operators and notification of rates by PTA. DG (CA), PTA informed the meeting that the signing of agreement had been delayed upon PTCL's request and rates could not be notified by PTA since industry consultation is required under AP Rules 2004, which is yet to be carried out, as there was no time limit prescribed in the policy directive.
However, senior PTA officials said that PTA had notified rates in accordance with the policy directive on August 30 this year, while PTCL and LDI operators signed the agreement. The issue between the CCP and PTA on the establishment of the ICH took a new turn when the CCP issued a special order to the PTA, barring the authority from taking any anti-competitive step by establishing the ICH Exchange. The CCP had issued a policy note to PTA and MoIT on August 28, terming the establishment of ICH Exchange as anti-competitive, sources maintained.
The special CCP order states: "Kindly note, as advised in the Policy Note, proposed ICH Arrangement involves price fixation and sharing of market (quota allocation) between the LDI Operators, which are considered per se illegal, being the most pernicious anti-competitive conduct. In the event, the proposed ICH Exchange agreement is entered into, it shall result in initiation of proceedings in accordance with law against all concerned."
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