Order International Clearing House Agreement among LDI Operator Order 08-02-2012

Background Facts:

The Competition Commission of Pakistan, through this order disposes of the Exemption Application jointly filed by Long Distance and International licensees namely; (i) Pakistan Telecommunication Company Limited (PTCL); (ii) Multinet Pakistan (Private) Limited; (iii) 4B General International (Private) Limited; (iv) Wi-tribe Pakistan Limited; (v) Dancom Pakistan (Private) Limited; (vi) Wise Communication System (Private) Limited; (vii) Worldcall Telecom Limited, (viii) ADG (Private) Limited; (ix) Link Direct International (Private) Limited; (x) Telecard Limited; (xi) Circle Net Communications Pakistan (Private) Limited; (xii) Wateen Telecom Limited; (xiii) Redtone Telecommunications Pakistan (Private) Limited; and (xiv) Telenor LDI Communications (Private) Limited, under Section 5 of the Competition Act, 2010, to seek exemption for their proposed International Clearing House Agreement entered between PTCL and the LDI Operators.

Under the said agreement, the LDIs, inter alia, intended to assign their rights to terminate incoming international traffic to PTCL, granted to them by PTA under the LDI License whereby PTCL was to act as the sole LDI operator. Essentially, the agreement i) was giving PTCL the monopoly to receive all incoming international traffic; (ii) having a single rate for incoming international traffic; and (iii) dividing the market share of incoming international traffic. The applicants provided several justifications where Transworld Associates (Private) Limited being a competitor opposed the application.

Orders:

,p>Based on the oral and written submissions, the commission allowed the withdrawal of the exemption application. However, it may be noted that if in future the Applicants enter into such agreement/arrangement, notwithstanding, any authorization obtained from any other authority such agreement/arrangement prior to its execution would require clearance from the Commission, as, prima facie, it has serious competition concerns and would attract the provisions of the Competition Act, 2010.