What’s Wrong With Long Distance Calling Industry In Pakistan And How To Fix It
In case you are wondering why does it cost so much to call Pakistan, see this great summary post about long distance communication industry in Pakistan from Tariq Mustafa. I’ve included 2 excerpts to provide background but you ought to read the full post.
LDI-backed Anti-voip Move – Now More Evil
When PTCL was a monopoly in telecommunications in Pakistan and in came the cellular operators, positive things happened for the consumers – services improved, rates declined and availability got almost ubiquitous. Of course, the financial success that the cellcos met in Pakistan is an over-stated fact.
The left-behinds in all the high-water mark events mentioned above were the LDI operators who, while started off with great zeal and put in a lot of money too, found the telecoms environment too diluted and with much of undercutting going on. The rates (for termination inside Pakistan) went as low as 1 cent per min for wholesale carriers. A number of LDI operators burnt out in these conditions never to be seen again.
Later, around the beginning of this year (2008), sanity finally prevailed and the LDI operators and the authority decided that it was time to end the next to free rates to Pakistan termination traffic and raised the nominal tariff to 10 cents per minute. This move, which was essentially about LDIs putting their own house in order, alone injected a new life in their business. Salaries for the staff started coming in time and new equipment started being ordered by the operators.
Despite some undercutting, the rates in the international market for wholesale termination inside Pakistan are still above the 7 cents per minute mark and this leaves a considerable room for the operators to keep and take their business forward. According to rough industry estimates, only the recorded business is worth in access of 700 million minutes (or $35 million @ 5c/min) per month (grey traffic not included).
The LDI operators, in an effort to pump more out of this new found oil well, requested en mass the PTA to go after the grey traffic operators and invested in equipment that claims to detect and mitigate voip traffic in real time. This equipment has been on the international exit points in Pakistan. Suspected IP traffic was detected and investigated to see if it grey, or belongs to an un-intimated call center. This stuff was reportedly being done manually so far.
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