Telenor LDI Communications exits ICH

Telenor LDI Communications exits ICH

Telenor LDI Communications (Pvt.) Ltd (TLC), a subsidiary of Telenor Pakistan, has, on 25 January 2014, made its exit from the International Clearing House (ICH) due to heavy losses to Telenor as an enterprise. Telenor has raised this concern a number of times with the relevant authorities.

Telenor LDI Communications PVT (TLC) joined ICH in compliance with MOIT policy directive issued on 13 August 2012 endorsed by PTA. As part of this policy directive, Mobile Termination Rate for international incoming (MTRI) was proposed for mobile operators. Unfortunately, this policy was never implemented in its true letter and spirit as the separate provision of Mobile Termination Rate for international incoming (MTRI) traffic termination was never determined or disbursed to mobile operators even after a lapse of more than a year. Resultantly Telenor enterprise has faced financial losses of more than PKR 2.2 billion since the establishment of ICH and upward revision of Total Accounting Rate/Access Promotion Charge.

Commenting on the development, Muhammad Aslam Hayat, Vice President Corporate Affairs Telenor Pakistan said, “Elimination of grey traffic is a focus area for us. We have worked closely with the regulator in reducing grey traffic that is detrimental to telecom operators and the economy alike. Unfortunately, it has been observed that the grey traffic has increased considerably since the formation of ICH and upward revision of Total Accounting Rate/ Access Promotion Charge. This has also had an adverse effect on our business thus causing substantial revenue losses that are affecting our ability to run as a stable business entity. Staying in ICH in these circumstances was no more an option. However we are still looking towards the government and PTA to take necessary steps in reducing grey traffic.”
It is worth mentioning that over 90% of international incoming traffic is terminated on cellular mobile operators’ networks. This termination after ICH’s implementation has been reduced by more than 75% on average for all operators and has subsequently led to plummeting revenues. After the implementation of ICH the overall international incoming traffic has reduced from 1.8 billion minutes to less than 500 million minutes per month while the corresponding mobile termination revenue on incoming international traffic has therefore drastically declined from PKR 1.6 billion to PKR 450 million per month.