CCP terms ICH, price fixation quota allocation illegal

STAFF REPORT IBD: The Competition Commission of Pakistan (CCP) has asked the IT Ministry and PTA to withdrawal the directive issued by the ministry proposing establishment of international clearing house exchange for international incoming calls for long distance international, fixed-line local loops, wireless local loops and mobile operators (proposed ICH arrangement).

In its policy note, the CCP has also advised the ministry and PTA that any such proposed arrangement if entered into, is not tenable in terms of Section 4 of the Competition Act, 2010.

The Proposed ICH Arrangement has been supported by the ministry for amicable settlement of the 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.

With respect to the curtailment and elimination the grey traffic, CCP has observed that under the proposed ICH arrangement the termination rate for Pakistan is expected to go up to 8.8 cents. This may provide further incentive for grey market players to increase their traffic.

The CCP in its policy note explains that under the directive and proposed ICH Arrangement price fixation and sharing of market are promoted. Such practices are considered illegal being the most pernicious anti-competitive conducts. Competition regime is all about applying competition policy and principles of law to make undertakings compete vigorously with each other. This fair business rivalry ensured through the competition rules brings efficiency, increased productivity, creates a wider choice for consumers and helps reduce prices and improve quality.

It also plays an important role in weeding out inefficient undertakings and relocation of output from less productive to more productive undertakings.Pakistani farmers.

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