LAHORE - The Competition Commission of Pakistan chairperson Rahat Konain Hassan on Tuesday asked the Ministry of Information Technology and Pakistan Telecommunication Authority to withdraw the decision to establish an International Clearing House (ICH) exchange, as it is the against the rules of competition.
The CCP chairperson, at a briefing of the Lahore Economic Journalist Association, said the decision was not tenable in terms of Competition Act 2010.
The briefing, which was arranged for the capacity building of the LEJA members, was also attended, among others, by its president Zahid Abid, vice president Muhammad Riaz and general secretary Ishtiaq Hussain.
Rahat Konain said that the IT ministry had issued a directive this month to establish an international clearing house (ICH) exchange for international incoming calls for long distance, fixed-line local loops, wireless local loops and mobile operators. The proposed clearing house exchange arrangement has been supported by the IT Ministry through its directive for amicable settlement of pending cases relating to Access Promotion Charges (APC) and to curtail and eliminate the grey traffic, in line with the existing Deregulation Policy 2003, and the existing regulatory regime.
Rahat Konain observed that while it may be within the domain of IT ministry to issue policy directives in relation to the subject industry, it needs to be appreciated that any such policy decision is in fact subject to the substantive provisions of the statute in force.
Also, in future if an arbitrage opportunity exists, the players operating in grey traffic will likely exploit that, thus ICH move is unlikely to curb the grey traffic and may kindle its further growth, she added.
CCP chairperson said that through the proposed ICH arrangement it appears that the competition among the LDI operators is restricted as each operator will have a guaranteed quota of incoming international traffic as per their existing market share.
She further noted that the proposed ICH arrangement directly violates Section 4 of the Act, and particularly, clause (a) and (b) of subsection 2 of Section 4 which prohibits price fixing and division of market via quotas.
She concluded that under the directive and proposed ICH arrangement price fixing and sharing of market quota allocation are promoted, which negates the rules of competition.