Why calls to Pakistan have become expensive?

Society Pakistan & World Affairs
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So guys, our beloved government isn’t done yet.

LAHORE - The International Clearing House (ICH) will start operations from October 1, 2012 in accordance with the policy directive issued by Ministry of Information Technology (MoIT) on Thursday, as all players of the Long Distance International operators, including the Competition Commission of Pakistan and Pakistan Telecom Authority have given a go ahead in this regard. Officials said that the Ministry of Information Technology on Thursday issued policy directive to establish ICH exchange for incoming international calls. In light of the directive, PTCL and other LDI operators have signed ICH exchange agreement to channel all incoming international traffic from a unified gateway, they added. According to the agreement, PTCL will manage the gateway while all revenue will be shared by LDIs. Further, PTA has notified Approved Settlement rate (ASR) at USc8.8 per minute, LDI share USc5.9 per minute and Access Promotion charges (APC) USc2.9 per minute to be implemented from October 1, 2012. Sources also revealed that the rate has been agreed upon, however, fine-tuning of operational modalities would take in two or months and all LDI operators will keep channeling incoming international traffic through current setup during this period. Although the CCP has expressed reservations against the idea in its policy note to MoIT and PTA, it is believed that concerns of the commission will be clarified by the Ministry. It is to be noted that cartelization, quota allocation and distorting free competition are untenable under Competition Act 2010. In this regard CCP barred LDIs, on February 8, 2012, to enter into such agreement without seeking exemption from CCP. However, this time LDIs are just complying with the federal government order to establish ICH as directive has been issued by MoIT. As per Zeeshan Afzal, the noted telecom expert, CCP cannot issue orders to government while it can even provide exemption, if seek. It is said that commission has done its part by issuing advisory note to the MoIT and any direct action against LDIs is less probable as whole ICH is under the umbrella of government. However, in this regard judicial activism may prove to be legal hindrance.He said that the steep increase in termination rates is likely to provide incentive for grey traffickers leading to drop in total industry minutes. Industry sources reveal that average 1-1.2 billion minutes are terminated in Pakistan every month, while it is expected the industry volumes to drop by 30 per cent after the establishment of ICH.

Today’s Paper | The Nation

I read this on another forum and hoped against hope that it wasn’t actually true as we have a big family and make lots of calls to Pakistan mostly using localphone.com.
Just checked my email and it is indeed true that our beloved Pak government has increased some tax which means most people calling to Pakistan from overseas will have to pay 5-7 times more.
My call rates have gone up from 2c/min to 11c/min which makes MASSIVE amount of difference as we call a lot. Pak govt is hoping to make millions of Dollars per month with this tax.
I am sorry if this is not the best section to post this but surely another achievement by our government to make life easy for Pakistanis?

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Re: PPP & Zardari's GIFT to Overseas Pakistanis

^^^ So, you think its govt's job to make calling to Pakistan cheap? Why?

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Re: PPP & Zardari's GIFT to Overseas Pakistanis

Govt. doesn't have to 'make it cheap'. Market had already made it very cheap. It's the excessive tax by the govt. that is making it expensive again.

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Re: PPP & Zardari's GIFT to Overseas Pakistanis

^^^ Define excessive tax? I remember when calling from the US to Pakistan used to be around $1.00 per min. Now its .09c and people are complaining. Btw, you can always use smart phones apps like tango to make free phone calls. It works for me.

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Re: PPP & Zardari's GIFT to Overseas Pakistanis

It used to be 1-2 cents before this tax. It's still 1c to India. This is at least a 7 fold increase. Calling cards that were worth 600 minutes are now worth 90 minutes.
This is disasterous for people who call their families a lot.

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Re: PPP & Zardari’s GIFT to Overseas Pakistanis

Come on Shamraz, govt has decided to impose a new tax which will result in call rates to Pakistan bieng increased by upto 700%. Pakistan has been excluded from MOST packages offered by various VOIP companies across the world and you don’t think it’s government’s responsibility?

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Re: PPP & Zardari's GIFT to Overseas Pakistanis

^^^ I think I know what the problem is. No matter where, Pakistanis just don't want to pay taxes. Think of it this way. You're helping your country by paying higher taxes. ;)

Btw, calling UK or the ME countries from the US is more expensive than calling Pakistan.

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Re: PPP & Zardari's GIFT to Overseas Pakistanis

Paying taxes is one thing but how on earth can you justify increasing taxes by 600%? I am as happy to pay taxes as any other person in Australia (or any other country for that matter) and i would even pay extra 500% charges ONLY if i knew my money would help Pakistan but do i really trust Zardari government with my money? BIG NO!!!!

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Re: PPP & Zardari’s GIFT to Overseas Pakistanis

And if you think i am overreacting, check the email from my service provider:

[TABLE=“width: 560”]

[TABLE=“width: 100%”]
[TR]
[TD]Hello Customer

[/TD]
[/TR]

[TABLE=“width: 100%”]
[TR]
[TD]As you are probably aware, the cost of calls to Pakistan increased dramatically today due to a Pakistani Government decision to impose a tax on all calls from overseas.

**This has increased the rate by over 500% and put the market into turmoil. **

When this has happened before we were able to quickly reduce our rates as the market settled, however this time the new law forces all calls through a single incumbent carrier, Pakistan’s PTCL. **This has removed any competition from the market to drive down rates. **

Many of the world’s largest carriers are also blocking routes into Pakistan in protest at the tax, resulting in severe congestion for all calls. **Please be aware that it may take several attempts to get through to the person you are calling. **

We are truly sorry that this has happened, but it is out of our control and is affecting every carrier that sends calls to Pakistan. We will work extremely hard to get you lower rates and will pass on any savings immediately.

For more information please see this website.

Kind regards,

[/TD]
[/TR]

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Re: PPP & Zardari's GIFT to Overseas Pakistanis

It is actually PPP & MQM's gift to overseas Pakistanis.

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Re: PPP & Zardari’s GIFT to Overseas Pakistanis

Maybe some pressure from our arab brethren, as Etisalat (UAE based company) owns management of PTCL now.They dont want to pay their staff but want to extort as much as they can.

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Re: PPP & Zardari’s GIFT to Overseas Pakistanis

http://www.thenews.com.pk/Todays-News-2-135087-Expats-to-pay-up-to-$150m-a-month-to-call-Pakistan

LAHORE: Overseas Pakistanis will have to pay around $120-150 million per month to talk to their near and dear ones, as an International Clearing House (ICH) regime is going to be operative in the country from today (October1, 2012).

The call rates for overseas Pakistanis have increased from 10-10.5 cents to 10-12 cents per minute under the new regime, implemented by the Pakistan Telecommunication Authority (PTA). The Competition Commission of Pakistan (CCP) has objected to the move, saying it can create monopoly of any one operator and increase grey traffic in Pakistan.

According to the telecommunication industry sources, the rates of the Long Distance International (LDI) operators have increased the cost of overseas calls and new revised rates would be implemented from Oct 1, 2012, as instructed by the PTA.

A PTA official said the basic objective behind establishing the ICH was to control grey traffic.It would not increase grey traffic, and different telecom operators would get their quota as per their existing share in the ICH whose infrastructure has been provided by the telecom industry, he added.

According to available data, monthly international calls traffic to Pakistan is 1.5 billion minutes and the increase in rates by 10-12 cents per minute is an additional burden on the overseas Pakistanis, who will have to pay around $120-150 million monthly.

According to a telecom industry official, at a time when the international call rates for overseas Pakistanis were 5 to 6 cents per minute and monthly call traffic was around 400 million minutes, a number of grey telephone exchanges were traced and busted by the PTA. Following decline in international calling rates to 1.5 cent per minute, the legal traffic has increased to 1.5 billion minutes per month. He feared that legal international calls would again drop, as the world is competing around 1 to 2 cents per minute, but Pakistan has increased it to 10 to 12 cents per minute.

Meanwhile, a spokesperson for the CCP said various overseas Pakistanis have expressed their concerns over increase in rates. They complained that now they would have to pay more to talk to their near and dear ones and the remittance to Pakistan will also decrease.

Apprehensions have been expressed that economic activity will suffer as overseas companies will be discouraged to do business with Pakistan. The worry is that if establishment of International Clearing House (ICH) and the rates fixed for termination of incoming overseas calls to Pakistan are given effect as proposed by the Ministry of Information Technology (MoIT) and Pakistan Telecommunication Authority (PTA), it will become very expensive in Pakistan in comparison with the neighbouring countries.

Haroon Piracha, former member National Assembly and corporate member Islamabad Stock Exchange, said as technology keeps on changing, conventional means of raising revenue appears to be a short-term gain. “While a higher tariff structure might seem good for one year, web-based communication solutions like VIBER available on cell-phones will make conventional means of raising revenue and stifling competition redundant.”

Dr Huma Bukhari, the chairperson of Consumer Association of Pakistan, said the ICH was an issue of consumers concern and the CCP should be fully supported in its efforts to protect consumers’ interest.

Kaukab Iqbal, president of the Consumer Association of Pakistan, warned that if the decision to establish the ICH was not shelved by the PTA, the consumer groups would take the matter to a court of law.

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Re: PPP & Zardari's GIFT to Overseas Pakistanis

I think the problem is that it was increased abruptly & that is why people are complaining about it. Otherwise, 9C seems like a bargain compare to what it used to be once up on a time.

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Re: PPP & Zardari's GIFT to Overseas Pakistanis

Another thing I fail to undestand is that why the government wants to route all international traffic through PTCL, as that would effectively kill competition and nullify deregulation of the telecom sector.

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Re: PPP & Zardari's GIFT to Overseas Pakistanis

Why are you guys complaining? You should be thankful that Rehman Malik is not the PTA chairman. Since grey market operators use such calls, we could see a ban on telephone calls made to Pakistan if he were.

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Re: PPP & Zardari's GIFT to Overseas Pakistanis

Shamraz, what prices used to be in the past is none of our concern, with communications all over the world changing face, we should be finding it easier to make calls in competitive rates , but here we are , making calls as if the telephone technology was just discovered yesterday !!!

Who exactly is benefiting from this tax? the people of Pakistan? how naive if we believe that .. its none other then Etisalat and a major dajaal of Pakistan : Zardari.

They want to milk every resource of Pakistan with their short term money making policies so that by the time they run out of their government time they have made use of every penny/cent/paisa that they could extract out of the people. I cant believe the people who are supporting this pathetic tax and for that matter any other illogical tax being levied on the pakistani nation as well ..

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Re: PPP & Zardari's GIFT to Overseas Pakistanis

This is an odd comparison. As technology improves, prices are meant to go down. Just because we used to pay 40 rupees a minute for Lahore to Karachi calls once upon a time doesnt mean we should be ok if they go up to 20 rupees a minute now, just because we used to pay 40 rupees once upon a time.
I agree with Ali, it is very likely because of Etisalat pressure that this has happened. I hope people beat PTCL and start using internet based communication more and more. Its a matter of common sense. Low rates meant people used to call more using telephones, and consequently, their revenue stream was decent. Now people will use it much less, thanks to this asinine policy.

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Re: PPP & Zardari's GIFT to Overseas Pakistanis

The technology has changed a lot during the past few years, hence the reduction in prices. The exchanges which used to very large are getting more and more compact and being replaced by routers and soft switches which has reduced the cost of telecom infrastructure. The government is not giving the people undue favour by reducing prices, anyhow I am not that much concerned about the rise in incoming calls. The way the government is trying to create PTCLs monopoly again is alarming.

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Re: PPP & Zardari's GIFT to Overseas Pakistanis

Shamraz, try to put yourself in our shoes. How would you like to pay 9c per min for your tango calls?

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Re: PPP & Zardari’s GIFT to Overseas Pakistanis

Govt’s job is to make life miserable in anyway possible and I believe PPP is doing one hell of a job in this regard :k:

The technology has facilitated to drop these rates, may be Pakistan should also start to charge for emails so revenue will be even higher. Stop collecting tax from right places, strangle tech-economy :k: