This is bad news for Pakistanis abroad: they will pay considerably more for calling Pakistan starting May 1. See the news item from Dawn. It seems to me that we are regressing in terms of policy making. Who benefits from this? PTA and long distance operators. What about consumers? Well, a lot of consumers and industry experts are upset and are taking various actions such as expressing their concerns through various offline and online channels (see this petition). One thing is certain: the grey telephony market will flourish because of this. Expect more noise around this in the coming days. I am not looking forward to my next bill for international calls!

Salman Ansari (former CEO of Paktel) has posted interesting predictions at various online forums. Here’s an excerpt:

Quality of calls of inbound calls specially from the US will become terrible (cellular terminations) as most inbound terminations will come in via low cost grey market – biggest culprits will be the biggest carriers (AT&T, Bell Canada, etc).

Wasim Baig summarized his views about this change at TGP:

Pros:
1. LDIs get a higher rate, higher margin
2. APC contribution increases
3. Origination increases
4. Balance of trade in PK’s favor

Cons:
1. Grey market increases
2. LDI may increase origination rates as well
3. Yet more regulation! PTA stays relevant to pricing ..
4. Market pricing takes a back seat

Here’s more from Dawn article.

“The PTA, in fact, has addressed the demand of local operators, who have been pleading for increase in such rates, as it would not affect the local consumers of the facility,” said the source. “But it would naturally increase the cost of calling to Pakistan from outside”.

The experts raised serious concerns over the telecom watchdog’s decision, who termed it contradictory to the measures it had earlier taken to curb the illegal voice trafficking. The PTA in 2006 cut ASR by 38.61% in an effort to reduce financial incentives in ‘grey telephony’.

“If the ASR is increased it will cause illegal international call rerouting by LDI operators and some illegal operators may also increase rates seeing the opportunity,” said Ansar-ul-Haq, a telecom consultant.
“The increase in ASR will also increase the tele-density gap and the private operators would not launch telecom services in comparatively lower profit-earning rural areas, he added.”

Grey telephony is a term referred to the illegal telecom traffic in which calls from foreign countries are brought in the country as local calls, while using illegal means. This is an offence under Telecom Reorganisation Act, 1996. The sources privy to the PTA, however, argued the increase in ASR rate was unlikely to damage the revenue, as the authority had already deployed technical solutions to check grey traffic brought into the country through illegal means. “The main objectives of the technical solution include automated detection of grey traffic for its consequent elimination, and revenue assurance for LDI operators,” said the source.“After successful deployment, the solution would be able to filter IP traffic of the country for detection of illegal VoIP on data circuits for consequent legal action against the culprits.” In such situation, he said, the PTA was confident that a large volume of illegal voice traffic always remained under check of the authority and could not damage the legal telecom’s business.