The Competition Commission of Pakistan (CCP) is a bench comprising Chairperson Ms. Rahat Kaunain Hassan, Member Dr. Joseph Wilson and Member Shehzad Ansar approved the transaction to annulled the International Clearing House (ICH) Agreement by the 14 LDI operators. The order also imposed a huge penalty of 7.5 % of yearly revenues of each LDI for violation of Sec 4 of the Competition Act, 2010. The penalty amounts to billions of rupees as only the penalty of Rs 8.309 billion, Rs 534 million and Rs 189 million has been enforced on PTCL, WorldCall and Telecard respectively.
The penalty amount was based on the information offered by Pakistan Telecommunications Authority (PTA) which declares that number of inbound international calls in Sept 2012, before organization of ICH, was 1.9 billion minutes which decreased to 579 million as in Feb 2013.Despite loss of the inbound calling by 70 %, the approximated income of LDI Operators for the month of Sept 2012 before ICH was $8.37 million which raised to $59 million in Oct 2012 and currently appears at $34 Million in Feb 2013 tagging an improve of 308 % in Post ICH period. The main purpose of improve in Revenue was that inbound contact expenses were improved to 8.8 cents/minutes from prices around 2 cents/minute pre ICH.
The Bench said that the ICH agreement was the purpose for decrease in inbound calling, resulting in an inequality and interfering the healthy competitive environment of the market. It had also been the purpose by FCC had requested US telecom operators to quit expenses to Pakistani LDI providers. LDI providers have been instructed not to get into any such agreement later on again and recover the aggressive atmosphere amongst each other that persisted before execution 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 arrangement, a penalty of Rs 1,000,000 (one million) has been imposed on all the LDI Operators… 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.”
The LDI operators asked for forgiveness during the process that that they joined 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 expressed 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.”
May 2, 2013
I am afraid but there has been a major turn of events regarding this story. A petition was recently accepted at the Islamabad High Court against the appointments of the CCP chairperson and some members of the management. The petitioner has accused that these appointments were carried out unfairly and no merit or experience was considered before giving the entitlements. Now I am no Nostradamus but it is easily predictable that this has put a serious question mark on the legality of the CCP itself.