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The Competition Appellate Tribunal has upheld the Competition Commission of Pakistan decision that found PTCL and other long-distance international operators in violation of forming an International Clearing House. The tribunal confirmed that the arrangement fixed call termination rates and limited market entry.
The original CCP order held that incoming calls were routed through a single gateway run by PTCL and that rates rose from about 2 cents to around 8.8 cents per minute during the ICH period. The commission said incoming call volumes fell by about 70 percent and LDI revenues rose sharply.
In April 2013, the CCP had annulled the ICH agreement and imposed a penalty equal to 7.5 percent of annual turnover on each LDI operator. The tribunal maintained the finding of cartel behaviour but reduced the penalty to 2 percent of turnover generated from the ICH period. The court ordered the firms to deposit the reduced fine within 30 days or face reinstatement of the higher penalty.
The tribunal rejected claims that the operators acted under state compulsion. The judges noted records showed that the operators sought policy support for ICH. The ruling also added that the Competition Act 2010 is very applicable to both the public authorities and the regulators in case they induce competition.
This decision confirms that the competition law has the capacity to assess complicated telecom arrangements. It sends out a distinct message to a market that price fixing and market sharing may be followed by long-term sanctions and the loss of a market base. The actions of payment and compliance will now attract media and industry watchers.
This ruling may be partly lauded by consumers and small carriers that faced a hiked cost of overseas calls. Regulators of the rules would be interested to look at licensing regulations, and once they create fair entry, competition would be restored, and prices would be reduced.
