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USTR Recommends Pakistan to Withdraw ICH to Comply with WTO Obligations

USTR USTR Recommends Pakistan to Withdraw ICH to Comply with WTO ObligationsUnited States Trade Representative (USTR) has urged government of Pakistan to withdraw International Clearing House to to ensure the functioning of a competitive market for the termination of international voice calls and taking necessary steps to prevent collusive behaviour among international operators.

United States Trade Representative (USTR) is an agency that negotiates directly with governments to create trade agreements, to resolve disputes, and to participate in global trade policy organizations.

USTR mentions that LDI operators in Pakistan in October 2012 – upon direction of MoITT – established “International Clearing House” (ICH) under which thirteen Pakistani carriers assigned Pakistan Telecommunications Company Limited (PTCL) the exclusive right to terminate inbound international calls in Pakistan at the “approved settlement rate” set by the Pakistani Telecommunications Authority (PTA).

As part of the ICH agreement, every carrier, other than PTCL, suspended their interconnection arrangements for incoming international traffic and in turn received a fixed share of the revenues PTCL generates from the termination of incoming international traffic in Pakistan.

The new international termination rate set by the PTA was $0.088 per minute, an increase of approximately four hundred percent over the competitive market rate of approximately $0.02 per minute that existed prior to the ICH agreement.

Upon a petition filed by Brain Telecom, Lahore High Court suspended ICH and directed PTA to ensure pre-ICH rates for international incoming calls to Pakistan.

USTR said that multiple international carriers have informed it that PTCL remains the only provider of international termination services in Pakistan and that the increased rate of $0.088 per minute remains in effect, even though it is no longer mandated by the PTA.

Most recently, the Pakistan Supreme Court overturned the Lahore High Court ruling and remanded the matter back to the CCP.

United States Trade Representative, in its review, said that Pakistan’s actions to increase its international termination rates have led to a massive increase in rates for telecommunications into Pakistan, hurting both global telecommunications companies seeking to terminate calls in Pakistan and Pakistanis living abroad trying to call home as well as other non-Pakistani consumers.

The immediate cost to U.S. telecommunication companies (and their subscribers, if cost increases are passed on) will be in the tens of millions of dollars. As Pakistani companies and U.S. companies investing in Pakistan depend on competitively-priced telecommunications to engage in trade, Pakistan’s actions also stand to affect these companies’ competitiveness as well, to the extent that they depend on incoming international calls for their business (e.g. from customers, suppliers and affiliates).

USTR said that Pakistan is a member of the WTO with commitments under the GATS Annex on Telecommunications. Section 5 of the Annex on Telecommunication requires the provision of access to telecommunications networks and services in Pakistan on reasonable terms and conditions. The WTO Dispute Settlement Body has found that “access to and use of public telecommunications transport networks and services on ‘reasonable’ terms includes questions of pricing of that access and use.”

USTR commented that there is substantial evidence that Pakistan carriers participating in the market for terminating international traffic into Pakistan appear to be colluding to avoid competition and to fix the rate for such termination at a level significantly above the prior range of rates that was offered when all such participants were actually competing to provide such services.

These actions raise concerns about Pakistan’s obligation to provide reasonable terms for access and use as required by the GATS Annex on Telecommunications.

USTR said that it looks to Pakistan to ensure the functioning of a competitive market for the termination of international voice calls by rejecting the ICH agreement and taking necessary steps to prevent collusive behaviour among international operators.

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  • Pakistani

    they have no issue with UAE ???

  • Naushaad Khan

    So now we are going to believe everything the americans say??? Hypocrisy test coming soon!!!

    • Shahid Saleem

      No, instead we should believe what ordinary Pakistanis living outside Pakistan and trying to call their families say.

      And they say the same thing.

  • RD

    Can’t you guys read the article first? Its the Competition Commission of Pakistan (CCP) that initially raised the same objection. The Supreme court has now directed that CCP complete its proceedings within a month. So start believing and not blame everything on US. We won’t solve any problem that way. International incoming calls to Pakistan which were 15 billion minutes last year are to drop to less than 6 billion this year. Is that good for future investment in Pakistan? If I were a foreign investor I would look to go to Bangladesh or India which have 400% lower rates. Secondly we have lives miserable for overseas Pakistanis whose only joy was to talk to their loved ones in Pakistan.

  • Ali Syed

    This appears to be a sponsored artilcle. USA has different standards for different countries fro its own benefits. Earlier they were following the policy of “divide & rule” which temprarily appears to be failing due unity shown by LDIs in Pakistan. USA as well other foreign countries donot want transfer of the foriegn exchange to Pakistan on one pretext or the other. 90% of Pakistanies abroad are calling through alternate means like computer/iphone. CCP is more worried about ICH business on behalf of those who have/are using all possible means to avoid paying legtimate taxes in Pakistan. No one in Pakistan bothers to check and adopt means to stop denial of in flow of foreign exchange on account of free voice termination of calls by Skype, Vibra , Net2phone and host of other operators, all owned by Americans & Europeans. What a hipocracy!

  • http://www.facebook.com/james.khan.925602 James Khan

    the problem with Americans is that they can’t see progress in pakistan….pakistani all over the world are sending revenues in pakistan even in shape of making calls to pakistan …..well in that matter i support PTA

  • http://www.facebook.com/james.khan.925602 James Khan

    cool down bro and just answer me on simple question….why they never said a single word about taxes in gulf…the most expensive calls are for gulf countries…..calls from uk to pakistan is 4-5p/min but for gulf its 12-15p/min ….so they should go for those countries first.

    • zee

      Yes, I was a bit hot headed in my previous message. I apologize for that.

      Well, to be honest, I don’t care what the gulf countries are doing. If they are doing something wrong and are keeping their people back, should we do that too? Can we justify our mistakes by giving examples of the same mistake by some other country?

  • http://www.facebook.com/justice.singh.31 Justice Singh

    What is going to happen with the timeline that SC gave to CCP to conclude the case within 30 days starting from 1 april?? Is CCP in favour for PRE-ICH rates??? And what is this all about? Does it has connection with that?

    • RD

      Well if CCP tells ICH to disbands and threatens huge fines then the LDI operators may go back to Pre-ICH rates. We have to wait and see. I am amazed by @google-9607c7c778ff0a2da80323e6c84179ae:disqus who terms collusion of LDI as unity of Pakistan !!. This is not unity my friend. Its called a cartel. So if murderers and rapist join together, is that Unity of Pakistan?? Thats why CCP opposed it from day one when no one else from outside had any clue what was happening. Its hurting no one except Pakistanis working abroad and companies who have to do business with Pakistan. Also 90% of Pakistanis abroad don’t use internet to call back home as most of their families live in small towns and villages. Seven of my friends use telephone to call their parents in villages. Yes big city dwellers may use
      internet.

      • http://www.facebook.com/justice.singh.31 Justice Singh

        And otherwise it will not go to pre ich rates of CCP decides to let it here by then everything is ok? How honest is CCP to.solve this? I heard this all is from zardari??

  • Rohail Sangi

    I am a Pakistani living in the UK for the past 4 1/2 years, throughout this time I have worked and earned my living. The UK has been a good provider for me and my family, however, I do not mind paying an extra 3-5 pennies if the money is being used in the right way. Comparing ourselves with India or others would also raise the question about Sri-Lanka and the Gulf, so we should avoid comparisons. However, I do believe raising the price is not the issue, where that extra money is being used is!!!

    • zee

      If you believe that this money benefits Pakistan then you my friend, need help!

  • Fraz

    Pakistan is an independent state .ICH is beneficial for Pakistan and USA has no right to dictate us on call rates.Pakistan is getting more money through ICH and it should stay.All over the world countries decide independently about their commercial interests.We should not blindly start criticizing every step of our Government.

    • http://www.facebook.com/justice.singh.31 Justice Singh

      What are u talking about? If this step was taken in the sake of Pakistan then i would be happy to pay double for calling Pakistan. But this ICH and it’s money goes to foreign investors and is very bad for PK. They are out to steal money and launder it and behind this is zardari government like in 2008 when they also raise theyre rates. Please bro try to understand this shit