LDI Operators Agree to Implement ICH

14 Telecom operators with Long distance and International dialing license have have agreed to establish a centralized landing gateway for internet calls in order to curb grey traffic, reported Express Tribune citing a report by BMA Capital Research.

The gateway, International Clearing House (ICH), will make possible for all LDI operators to get international calls landed to a single technical gateway against the current practice of being handled by 14 Long Distance International (LDI) operators independently and that too at different rates, said the BMA Capital research note issued on Tuesday.

The largest LDI operator PTCL – with a 50% market share – will lead the technical consortium where the entire international traffic will land.

“The other operators will be allotted fixed quota in total industry revenues based on their respective market shares,” says the note.

The idea is to curb grey traffic and at the same time enhance margins on incoming international traffic.

Once the International Clearing House comes into play, the rates for overseas callers may witness a massive jump as any foreign operator terminating calls into Pakistan would have to pay Rs. 7.64 per minute (USc8.4/min).

“PTA issued 14 LDI licenses of which many have been struggling and some have defaulted on their license and debt obligations in the past. This is a lifeline for small, struggling operators but bigger players may not like an agreement that lets others benefit at their cost. Hence, tussles on quota may create problems in the future,” said KASB Securities in a research note. The entire arrangement is expected to be finalized by May 16.

Idea of International Clearing House was first tabled back in 2008, when PTA had proposed a centralized gateway for international traffic for all LDI operators in order to make illegal landing of voice calls impossible.

However, the implementation kept getting delayed for various reasons – mainly the revenue model and modalities of ICH. Even CCP had issued a verdict saying that ICH is anti-competitive and that LDI operators could withdraw themselves from ICH.

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