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Government Terminates International Clearing House (ICH)

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Government Terminates International Clearing House (ICH)

 

Government Terminates International Clearing House (ICH)

In the wake of rampant increase in grey trafficking, Prime Minister Nawaz Sharif has approved abolition of the International Clearing House (ICH) mechanism, which will reduce the rate of incoming calls to Pakistan from abroad.

According to PTA Statement:

After the approval of Prime Minister Nawaz Sharif, the Ministry of Information Technology, on the recommendation of PTA, has withdrawn its directive on the ICH issued in 2012 and making the APC (Access Promotion Contribution) rate to be zero.

The Ministry of IT issued its directives after consulting all the stakeholders, including the regulator Pakistan Telecommunication Authority (PTA). The PTA, in recent days, wrote two letters to the MoIT for giving its input and recommended to the government to deregulate the market as the monitoring mechanism required regular updates on all its equipment and even in that scenario, grey trafficking could not be controlled.

The market dynamics have changed altogether and it was a dire need to change the ICH policy. The PM took this decision after consulting all the stakeholders

After the withdrawal of the ICH, there will be now 15 LDIs fighting for their share to terminate the international incoming calls into Pakistan with flooring of the Access Settlement Rate (ASR) at around 5 cents per minute, which stood at 8.8 cents per minute level under the ICH mechanism.

  • The LDI operators – through agreements with foreign operators – terminate the international incoming calls on local networks and charge a fee on per minute basis.
  • Through the ICH all the international traffic is being handled by the PTCL, while other operators had withdrawn their commercial agreements with foreign operators and closed their circuits for termination of international traffic.
  • After the ICH within a few months the international incoming traffic from legitimate channels dropped from 2 billion minutes per month to below 500 million minutes per month. The rest of traffic is now coming through illegal channels labelled as grey traffic.
  • Another fact is that after the ICH policy, the use of Skype and Viber had increased manifold which had started giving a negative impact to those cellular companies that had invested billions of dollars for winning the 3G and 4G licences in Pakistan.

After witnessing this steep decline, the government was left with no other option but to withdraw the ICH policy in order to curb the grey trafficking and making the expatriate Pakistanis happy over the reduced rate of incoming calls from abroad.