Tribunal Upholds CCP’s Ruling Against PTCL and LDI Operators in ICH Case

The Competition Appellate Tribunal has upheld the decision of the Competition Commission of Pakistan (CCP) against Pakistan Telecommunication Company Limited (PTCL) and other long-distance international (LDI) operators. The ruling confirms that PTCL and LDI operators were involved in forming an anti-competitive cartel under the International Clearing House (ICH) arrangement.

The tribunal has ordered all companies involved to pay the imposed fines within 30 days. Failure to do so will result in the restoration of the original higher penalty.

Tribunal Upholds CCP’s Ruling Against PTCL and LDI Operators in ICH Case

In 2012, PTCL and other LDI operators entered into the ICH agreement. Under this arrangement, all international incoming calls were routed through a single gateway operated by PTCL, which served as the head of the consortium. This effectively eliminated competition as other operators closed their independent gateways.

The ICH also fixed a uniform call termination rate of around 8.8 US cents per minute. Previously, this rate was about 2 cents per minute. Along with fixing rates, the agreement also allowed revenue sharing and traffic quotas among operators. As a result, overseas callers faced higher call charges, and the local market was deprived of fair competition.

CCP’s Findings

The CCP investigated the matter and declared the ICH agreement as a cartel involving both price-fixing and market-sharing. In April 2013, the commission imposed a penalty of 7.5% of the annual turnover on each LDI operator.

The impact of this arrangement was clear. Incoming call volumes fell by almost 70%, dropping from 1.9 billion minutes in September 2012 to just 579 million minutes in February 2013. However, revenues of LDI operators shot up dramatically. Their earnings grew from $8.37 million to $59 million—a staggering 308% increase.

Tribunal’s Ruling

While upholding the CCP’s findings, the tribunal revised the penalty. Instead of 7.5% of annual turnover, the operators are now required to pay 2% of the turnover generated during the ICH period. However, the tribunal warned that if the fine is not deposited within 30 days, the original penalty of 7.5% will automatically apply.

The tribunal also rejected claims by LDI operators that they were forced into the arrangement due to “state compulsion” or directives from the Ministry of Information Technology. Evidence showed that it was the operators themselves who lobbied for and secured the policy directive for ICH.

Broader Implications

In its ruling, the tribunal clarified that the Competition Act, 2010, applies equally to government regulators and state bodies. This means even the Pakistan Telecommunication Authority (PTA) could be held liable for restricting competition in such cases.

The order also dismissed the argument that the CCP lacked jurisdiction because international incoming calls are free for local consumers. The tribunal noted that the case was not about end-user charges but about restricting market entry and competition, which directly affects the telecom sector’s health.

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