Competition Consultative Group Unanimously Supports CCP’s Stance on International Clearing House (ICH)

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ISLAMABAD, 28 SEPTEMBER 2012: The 16th meeting of Competition Consultative Group (CCG) was held at the CCP Auditorium on Friday.

The meeting was chaired by the CCP Chairperson, Ms. Rahat Kaunain Hassan and attended by CCP Members Mr. Abdul Ghaffar, Dr. Joseph Wilson, Mr. Shehzad Ansar, Mr. Mueen Batlay, Secretary to the Commission Mr. Hayat Jasra, Registrar of the Commission, Mr. Ikram ul Haque Qureshi, representatives of the Pakistan Electronic Media Regulatory Authority (PEMRA), Public Procurement Regulatory Authority, Pakistan Engineering Council, Islamabad Stock Exchange, Pfizer Pakistan Limited, Air Blue, Atlas Group, Faysal Bank Limited, Linde Pak, Unilever, Friedrich Naumann Foundation, the Consumers Forum, Consumer Association of Pakistan, ICAP, and daily Business Recorder.

The agenda of the CCG meeting was primarily to brief the participants on CCP’s recent initiatives and actions, which included inviting feedback on the proposed establishment of International Clearing House (ICH) through the policy directive issued by the Ministry of Information Technology (MoIT) and the competition concerns raised by CCP in its Policy Notice issued on 28th August, 2012. 

The CCP Chairperson while briefing the participants on the issue of ICH highlighted the competition concerns stating that the advances that the telecom industry has witnessed as a result of deregulation of sector; growth in volumes, low rates to consumer and more choices as well as better quality of services may stand negated. The proposed establishment of ICH, she added was not only against Telecom Deregulation Policy 2003, Competition Act, 2010 but also contravene Pakistan’s international obligation under General Agreement on Trade and Services (GATS).      

The participants of the Competition Consultative Group unanimously supported CCP’s stance taken in this regard, notable among them was former PTCL’s CEO at the time of privatization Mr. Junaid Khan, (currently CFO Air blue) who stated that “the proposed ICH does not address the core issue of grey traffic. He mentioned that establishment of ICH will increase the arbitrage in the international market (especially from UK and North America, the major call termination markets) and would thus encourage the grey market and the use of VoIP. The setup may improve the revenue of the major telecom players in the short term but may not benefit industry at large and consumers in the long run. He emphasized that this allows quota system to be promoted and the casualties will be merit, entrepreneurship, quality of service and incentive to growth, whereas, this policy will help bigger telecom players more than the smaller LDIs.”

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Mr. Haroon Piracha, Former Member National Assembly and Corporate Member Islamabad Stock Exchange said that as technology keeps on changing, conventional means of raising revenue appears to be a short term gain. “While a higher tariff structure might seem good for one year, web based communication solutions like VIBER available on cell phones will make conventional means of raising revenue and stifling competition redundant.”

Dr. Huma Bukhari, the Chairperson of Consumer Association of Pakistan, said that the ICH was an issue of consumers concern and CCP should be fully supported in its efforts to protect consumers’ interest. She said CCP’s mandate to promote and protect competition should be respected by all entities including the sector regulators as this practice and such policies could spill over to other sectors. She further said the ICH arrangement appeared to be a cartel, which was anti competitive and could harm consumers’ interest.

Kaukab Iqbal, President of the Consumer Association of Pakistan, said that if the decision to establish ICH was not shelved by PTA, the consumer groups would take the matter to court. He fully supported CCP’s stand on ICH.

The participants of CCG were further apprised of the upcoming peer review of the Commission by the United Nations Commission on Trade and Development (UNCTAD) to be carried out by a team led by Mr. Bill Kovacic, former Commissioner in the United States Federal Trade Commission (FTC), who is currently a professor at George Washington University. The Voluntary Peer Review is impartial and rigorous by nature and is undertaken by competition policy experts from both developed and developing countries who have practical experience in implementing competition law in consultation with UNCTAD staff.

This peer review has been volunteered by CCP and the evaluation will be shared at the next meeting of UNCTAD expected to be held in July next year and to be presented before 152 countries. The UNCTAD Voluntary Peer Review on Competition Policy provides a unique opportunity to review the substantive content of national competition laws and their implementation, to assess the impact of decisions and to examine and draw lessons from concrete experiences of countries implementing competition policies.