Why Are Pakistan’s Long Distance Calling Rates So High For SAARC Countries?
The long distrance rates for calls from Pakistan to some countries such as US and Hong Kong are the lowest compared to other countries in South Asia. However this is not true for calls from Pakistan to its neighbors in SAARC region. This disparity of rates was noted by Prof. Rohan Samarajiva at this LIRNE Asia post recently.
Leaving aside the question of the operators in the SAARC countries collectively lowering their termination rates to make possible more reasonable intra-SAARC call charges, the data also show that Pakistan has the overall lowest international telecom prices and Nepal has the highest. Hopefully, some of these prices will come down, now that the comparisons have been made!
The full study is here. I made a comment that the difference in prices to say US and Sri Lanka is perhaps due to market demand. As explained by Prof. Samarajiva:
International prices are driven by two factors: termination rates in the distant country and level of competition in the home market. Termination rates are not set by markets, though excessive termination rates will generate market response in the form of people trying to use arbitrage opportunities. Your argument holds only for the second factor. As the FCC recognized in the 1990s, govt action (ccordinated preferably) is needed to bring down termination rates.
I think it is very much a political factor that will drive the rates down. Hopefully the winds of change will help move in this direction as well.
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SAARC has taken on the task of lowering intra-SAARC prices of international calls: http://lirneasia.net/2008/08/now-for-implementation