CCP Hammers PTCL for Anti-Competitive DSL Pricings: ProPakistani

CCP Hammers PTCL for Anti-Competitive DSL Pricings
Concerns Shown Over Eric Schmidt’s Statement On Google’s Surveillance in Pakistan
Waseela Bank Join Hands with Adamjee Life Insurance
Rozee Gets a Mobile Friendly Website

CCP Hammers PTCL for Anti-Competitive DSL Pricings

Posted: 20 Jun 2012 02:32 AM PDT

A Competition Commission of Pakistan (CCP) inquiry team has decided that commission will commence legal proceedings against PTCL, said a report issued by Competition Commission of Pakistan.

CCP inquiry said that PTCL is likely to face legal action under Section 30 for prima facie violation of Section 3(1) read with Section 3 (2) of the Competition Act by monopolizing the market by offering anti-competitive DSL tariffs, that could lead other broadband companies to quit businesses.

Complaint Against PTCL

PTCL was facing an inquiry from CCP based on a complaint filed by Aqlaal Advocates on behalf of their clients Mircronet, LINKdotNET and Nexlinx by alleging that under the current regime for provision of Digital Subscriber Line (DSL) services, DSL Operators are dependent upon the infrastructure of PTCL as it owns and controls the required copper line infrastructure.

Complainant alleged that PTCL refuses to provide access to its copper infrastructure by refusing to cater requests of DSL Operators for issuance of new connections in a timely manner as required by SOP on DSL services.

The DSL Operators submitted that PTA informed the DSL Operators that such delays were caused in December 2009 as PTCL was upgrading its system. However, the DSL Operators have stated that PTCL was issuing new connections to its own customers during this period of system up gradation. PTCL has denied that it issued any new connections at the time the DSL Operators were not being issued new connections.

Complaint said that PTCL has shifted its public switched telephone network (PSTN) consumer numbers from the copper network to an optical fiber network which the DSL Operators do not have access to.

DSL operators said that PTCL has not only violated PTA's Numbering Plan Regulations, 2005 but also clause 7.2.1 of the IA and PTA's determination No. 15-70/07 (CA)/PTA dated August 3, 2007, according to which PTCL may not change the copper pair of a customer to optical fiber without the customers consent

DSL operators further alleged PTCL for creating operational problems for the DSL Operators, such as denial of their authorized staff to enter PTCL exchanges in violation of clause 7.2.1 (c) of the IA, delaying provision of infrastructure, cutting of cables, refusal to
provide collocation space, etc.

It was further added in complaint that PTCL has forcefully disconnected the connections of the DSL Operators provided to customers and started providing these customers DSL services through PTCL‟s DSL connection without even informing the customers.

Operators alleged that PTCL, through cross-subsidization and predatory pricing, is driving competitors out of the DSL market in violation of Section 3 (3) (f) of the Act, Section 26 (e) of the Pakistan Telecommunication (ReOrganization) Act, 1996 (the "PTA Act") and Article 11 of Schedule 2 of the 2000 Rules.

PTCL's Response:

PTCL in its response to complaint said that the determination of PTA that PTCL holds a dominant position has been challenged before LHC, Rawalpindi Bench and has been suspended. The matter is sub-judice and the complaint is an attempt to frustrate the judicial process.

PTCL said that it reserves the right to challenge the validity of the Act and constitution of
the Commission at an appropriate forum as the Commission lacks jurisdiction in this respect

PTCL said that the complaint incorrectly defines DSL as a service in the market, when it is merely one technology for provision of Broadband Internet Access. Therefore, it cannot be said that consumers cannot interchange or substitute the DSL technology for other technologies.

PTCL mocked by saying that the DSL Operators misunderstand the concept of predatory pricing which is clear as the allegations have not been substantiated by any legal argument.

PTCL in its reply said that it is incorrect that the DSL Operators are solely dependent upon PTCL for infrastructure as Nayatel provides broadband services through use of optical fiber technology (FTTH) instead of depending upon PTCL's copper lines.

PTCL said that there have been exceptions where extra time has been required by the DSL Operators have been timely informed by PTCL and PTA. PTCL customers were not given preference over DSL Operators customers and had to face the same problems.

The fault incidence is not attributed to PTCL only as numerous external factors are also responsible, such as poor in-house wiring, large scale damage to PTCL outside plant, utility companies, malicious cable cuts and theft and right of way (ROW).

PTCL denied that it has forcefully disconnected customers of other DSL Operators and only provides services on request of customers. PTCL also informed that it has offered the ISPs to work in partnership with PTCL for its white label DSL broadband services on revenue sharing basis. Under which PTCL will provide end to network infrastructure and resources and DSL Operators will provide marketing, sales, provision and installation of customer premises equipment, billing and revenue collection and after sales support services.

CCP Inquiry Findings:

Based on investigation conducted by CCP team, the findings of cost analysis suggested that the margins in the DSL retail market due to PTCL's pricing for the access to its copper network are insufficient for an efficient competitor to operate profitably.

The analysis of financial statements of DSL Operators appears to confirm that as a result of such low prices the profit margins of DSL Operators have gradually reduced and now they are operating under huge losses. Many of the players in the DSL retail market have exited the market.

The cost analysis of PTCLs DSL operations shows that it has been able to record profits despite offering very low retail prices and having very low margins. PTCL being a vertically integrated company, its DSL business does not incur/record some of the expenses such as co-location charges, copper pair rent, additional overheads etc. that other operators have to bear.

Additionally, the offers like double the speed without additional cost, upgrading of package etc are impossible for the competitors of PTCL to match.

Resultantly, prima facie, DSL operators are losing market shares and incurring huge operational losses and if this continues, it may lead to exclusion of further competitors and thus monopolizing the relevant market by PTCL.

Inquiry report said that lower tariffs are beneficial for the customers and are a good way to penetrate in a growing market for DSL based broadband services. However, such low tariffs and low margins are making this market unattractive for further investment, research and development.

This may result in competitors leaving the market and creating a monopolistic situation in the long run, thus leaving the customers on the mercy of a super dominant player who will be at its free will to exploit customers.

In light of its findings, inquiry team proposed that proceedings under Section 30 may be initiated against PTCL for prima facie violation of Section 3(1) read with Section 3 (2) of the Act.

Concerns Shown Over Eric Schmidt’s Statement On Google’s Surveillance in Pakistan

Posted: 19 Jun 2012 09:00 PM PDT

Bytes for All, a human rights organization with a focus on Information and Communication Technologies (ICTs), has shown serious concerns over Google's possible support to Pakistani government for surveillance of Pakistani citizens.

As we reported earlier, during his visit to Pakistan last week, Eric Schmidt, Google's Executive Chairman and Ex-CEO, was asked by Syed Yousaf Raza Gilani, former Prime Minister of Pakistan, to help Pakistan in tracking cross-border movement across the Durand line.

Bytes for All, while quoting news reports, said that Mr. Gilani asked the Google Chairman to help use technology to “compile electronic data of cross-border movement between Pakistan and Afghanistan, which would in turn help tracking down terrorists” and Eric responded by saying that “building up and maintaining of databases through use of information technology was crucial to deal with security issues as well as law and order situation”.

Shahzad Ahmed, the country coordinator for Bytes for All, told ProPakistani that his organization is alarmed by the impression that Eric's visit to Pakistan appears to be linked to Google providing support to the Pakistani Government to increase surveillance of its citizens.

He said that Pakistan is already notorious for the extent to which it violates citizen’s privacy without due process. That a company like Google, renowned for its support for internet freedom, could be complicit in such violations of rights is very disturbing.

Shahzad demanded Google to clarify its position on its possible support to Pakistan for monitoring Pakistani citizens who use Google services.

Google earlier decided to remain quite over Eric Schmidt’s visit to Pakistan, in fact his whole visit was kept hidden from media for incomprehensible reasons.

Analysts opine that Google's chairman's visit to Pakistan and his meetings with political leadership could have made more sense if outcome of these meetings had made their way to headlines, especially that we live in a democratic environment and Google is a publicly listed company.

Waseela Bank Join Hands with Adamjee Life Insurance

Posted: 19 Jun 2012 08:50 PM PDT

Waseela Microfinance Bank, which recently got the heavy weight CEO Ghazanfar Azzam, signed a partnership agreement with Adamjee Life Assurance.

The signing ceremony was attended by the top managements of Waseela Bank and Adamjee Life.

Under this arrangement Adamjee Life will provide various life insurance solutions to Waseela bank customers.

Waseela Microfinance Bank, subsidiary of Orascom Telecom Holdings and a sister concern of Pakistan Mobile Communications Limited (PMCL), has been established to cater to the needs of the vast under and unbanked market segments through simple and low cost channels such as branchless banking agents, community centers and smart branches.

Waseela MF Bank through an alliance intends to become a major player in the branchless banking arena and has plans to introduce mass market savings, loans, funds transfer, insurance and investment products to promote financial inclusion, promote economic and trade empowerment in both rural and urban communities.

Ghazanfar Azzam, President and CEO of the Waseela Bank said,

"Bank and its management will continue to research, innovate and offer customer-focused solutions that are easily accessible to the general public. The collaboration with Adamjee life is another step in achieving this goal."

Fredrik de Beer, CEO of Adamjee Life Assurance said,

"Adamjee is dedicated to explore innovative distribution channels that make insurance affordable and accessible, also create awareness amongst the public at large to make insurance part of an individual's financial and future planning. Collaboration with W Bank will positively contribute towards achieving this goal.”

It merits mentioning here that Waseela Bank recently received Branchless Banking License.

Rozee Gets a Mobile Friendly Website

Posted: 19 Jun 2012 08:45 PM PDT

Rozee.PK has launched a mobile version of its website that will let Rozee users search and apply for jobs more conveniently while on the move.

Mobile friendly version of Rozee.PK will also let users set up job alerts and let them match jobs according to their interests from their mobile phones.

Commenting on the application Chairman and CEO of ROZEE.PK Monis Rahman said,

"More and more of our interaction online occurs on mobile devices these days and the user's experience will be greatly enhanced through this application. Introduction of this mobile application will allow ROZEE.PK users to avail from our services on the go and will enable them to be constantly active in Pakistani job market."

This web application is supported by all HTML5 browsers and all the users have to do is log in to m.rozee.pk and access their account from their phones.

The mobile version of Rozee contains all the major features of the website itself and will allow job seekers a platform to try and attain a job that matches their ability and interest.

To read more, click: Rozee Gets a Mobile Friendly Website
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Wednesday, June 20, 2012