By Kalbe Ali

ISLAMABAD: The Competition Commission (CCP) has issued 24 show-cause notices to chief executive officers and other senior officials of the five cellular telecommunication operators on charges of cartelisation and price fixing.

The report of an inquiry said that in view of information received from insiders all the five firms had been found involved in collaborative pricing schemes.

The inquiry concluded that the companies had entered into an agreement to revise the price of SIM cards and missed call charges which amounted to a prima facie violation of the competition ordinance.

The inquiry was conducted by CCP Director Shaista Bano Gilani and Joint Director Waqqas Ahmad Mir.

It said discussions held at a CEOs’ forum had also been implemented, including imposition of a 10 paisa charge per balance enquiry.

It said pre-paid mobile SIM cards of all the companies were available at a minimum price of Rs150.

According to the report, it appears that the mobile companies have reached an understanding on important economic aspects of their business pertaining to costs of providing service, pricing, revenue enhancement, resource sharing and limitation on advertisements.

It said all the companies had given similar reasons for imposing charges and it appeared that they had colluded on those aspects of the business.

There are about 94.3 million subscribers of mobile services in the country and a small price movement by these companies has a direct impact on them.

The companies apparently compete on core services like call and SMS rates, but have colluded to fix prices of services like balance enquiry, missed call and SIMs.

Replies to questions by the firms disclosed that the number of SMSs for balance enquiry was nearly four times the number of other SMSs by pre-paid customers.

It appeared that the operators had adversely affected the interest of customers and restricted competition in the market, the report said.
Source: Dawn
Date:2/6/2010