• Friday, August 01, 2014

IGWs plan to form cartel

Abdullah Mamun

A group of international gateways is going to form a clearing house to control the entire cache of overseas calls, in potential violation of the competition law and long distance policy.
IGW Operators Forum, comprising 17 gateways of the total 29 in the market, plans to set up the IGW clearing house, which may also allow for a murky window for collecting unspecified fees.
Usually the gateways transmit international calls to operators through the exchanges connected to other gateways.
If the plan gets through, the gateways will be connected with the clearing house, forming a cartel to control the sector, said some IGW investors who do not want to join the forum.
The IGWs' forum sent a proposal to Bangladesh Telecommunication Regulatory Commission to form the clearing house, said Abdus Salam, co-convener of the forum.

A model has been proposed so that the interests of all the gateways are protected and the government's revenue ensured, he said.
BTRC Chairman Sunil Kanti Bose said the proposal is currently being examined.
The proposed clearing house will have two tiers. IGWs in tier 2 will transmit international incoming calls to telecom operators through interconnection exchanges, while tier 1 will only send its entire calls to tier 2, according to the proposal.
The system would create a revenue-sharing model that distributes twice the revenue to tier 2 gateways compared to that in tier 1.
The proposal also said the international incoming call rate will be fixed by the clearing house in accordance with BTRC rules. Each member will contribute Tk 48 lakh a year to the forum to maintain the system.
Also, the forum proposes to collect 'unspecified' amounts from the gateways to stop the illegal
use of VoIP (voice over internet protocol).
“A cartel in the guise of a clearing house violates the competition law. Therefore, such a move is absolutely illegal,” said Abu Saeed Khan, a senior policy fellow at Colombo-based regulatory think tank, LIRNEasia.
“Bangladeshi migrant workers will be paying excessive charges while calling home if the clearing house is allowed,” he said.
Citing an example of Pakistan, Khan said, “The then government of Asif Zardari had unscrupulously introduced clearing house in 2012 to disastrous consequences.”
The Competition Commission of Pakistan noted in early 2013 that the implementation of the clearing house had led to a 70 percent drop in international voice traffic and a 31 percent decrease in taxes, but a 308 percent increase in revenues for the clearing house operators.
Tanjib Alam and Associates, a law firm that deals with telecom issues, said, as the tier 1 IGWs will no longer transmit calls, they will not feel the need to invest further, reducing overall investment and leading to violation of the Competition Act.
Setting call rates by the clearing house is also a violation of the Act as the gateways will no longer have freedom to charge the amounts they wish within the regulator approved tariff range, the law firm said.
The clearing house model also violates the income tax ordinance as tier 1 companies will not transmit any call and thus not be eligible for tax benefits, it said.
A BTRC official said all the gateways are compelled to connect the operators through interconnection exchanges when they transmit calls. The government will need to amend the guideline and the long distance policy to pave the way for the clearing house.
“Someone is trying to inject the Pakistani malpractice model into the telecom sector, which will criminalise the industry,” Khan of LIRNEasia said.

Published: 12:00 am Wednesday, July 02, 2014

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