Curbing grey traffic: Govt to discontinue to ICH regime

The ministry’s directive to PTA will be effective from August 1, 2014.

ISLAMABAD: In a bid to crackdown on grey traffic and reduce call rates for expatriate Pakistanis, government announced on Wednesday that it was discontinuing the International Clearing House (ICH) regime.

Ministry of Telecommunication on Wednesday ordered the Pakistan Telecommunication Authority (PTA) to dicontinue with the ICH regime as the policy has failed to achieve its objectives.

According to press release, the ministry’s directive will be effective from August 1, 2014, having given sufficient time to Long Distance International (LDI) operators for discharging their commitments under the prevalent ICH arrangement.

On August 13, 2012, the ministry of IT had issued the ICH Policy Directive which aimed at restructuring the way international telecom traffic terminated into Pakistan. Under the ICH policy, all incoming international cellular traffic was routed through a single gateway operated by PTCL as the head of LDI ICH consortium. However, the policy did not achieve its objectives as it led to exponential increase in call rates for oversees Pakistanis and high volumes of Grey Traffic due to which net incoming calls were also reduced substantially and were converted either to over-the-top services or to grey and illegal channels, which bypass legitimate, licensed gateway.

Although collection of APC for USF increased through ICH arrangement as compared to previous regime set by the de-regulation policy 2003, the government decided to discontinue it. The move will result in significant financial loss for the government in terms of revenues generated.

The government claimed that the move was being taken in the larger national interest, particularly to provide relief to expatriate Pakistanis and to eliminate the menace of grey traffic which was beginning to contaminate the entire sector.

It was further contended that the Competition Commission of Pakistan had already declared the ICH arrangement to be anti-competitive and violative of the Competition Act 2010.

A key ingredient of the revised directive is to put APC on zero for the time being in order to ensure complete deregulated environment around international incoming telephony.

Highlighting the expected benefits from the revocation of ICH policy, minister of state for IT and Telecommunication Anusha Rahman claimed that it will end the menace of grey traffic, make calls cheaper by six to eight rupees for oversees Pakistanis and promote healthy competition in the telecommunication sector.

As a result of the move, shares of telcos tumbled on Wednesday with PTCL shares down by four per cent.