PTA and MoITT to deal with ICH after spectrum auction

15 Apr 2014

The Pakistan Telecommunication Authority (PTA) and the Ministry of Information Technology and Telecommunication (MoITT) are planning to deal with the grey traffic market and the International Clearing House (ICH) after the completion of the 3G/4G spectrum auction, ProPakistani writes, citing unnamed sources familiar with the matter. The MoITT plans to dissolve the controversial ICH and reduce the cost of international calls by around 50%. According to TeleGeography’s GlobalComms Database, the ICH was established as a unified international gateway in August 2012 with the approval of the MoITT, despite opposition from antitrust watchdog the Competition Commission of Pakistan (CCP), which pointed out that the creation of the ICH effectively eliminated competition in the international voice market. All of the nation’s international long distance (LDI) operators were incorporated into the ICH under an agreement that would see each receive a share of the revenues. Unsurprisingly, the creation of the ICH was immediately followed by a substantial hike in fees for international calls and legitimate traffic plummeted as a result, encouraging the grey market to flourish. The issue of the ICH and its legality wound its way through Pakistan’s courts in 2013 but the ‘cartel’ has stubbornly persisted.

The PTA and MoITT anticipate that the dissolution of the ICH and the re-liberalisation of the international voice market will help increase traffic through legitimate channels. The PTA estimates that the prevalence of the grey market is currently costing the exchequer ‘billions of dollars’ in potential tax revenues.

The ICH is also understood to have been at the heart of the infighting amongst senior PTA officials in 2013. Controversial former ICT Secretary and PTA Chairman Farooq Awan and former President Asif Ali Zardari were accused by a senior official of cableco Nayatel in late 2013 of accepting more than PKR1 billion (USD10.25 million) in bribes to establish the ICH, including an initial payment of PKR800 million and PKR100 million-PKR150 million per month once the ICH was active.