Anti-trust body fines DHA and Wateen Telecom

ISLAMABAD: The Competition Commission of Pakistan has slapped Rs10 million in penalties on the Defence Housing Authority (DHA) for violating the anti-trust law on Tuesday after finding out that the Authority had an exclusive deal with a private telecom service provider.

Anti-trust watchdog passed an order against DHA and Wateen Telecom after it established that the agreement prohibited competition for provision of media and telecommunication services in the vicinity of DHA. It also imposed a fine of Rs 5 million on the telecom company.

The CCP bench comprising chairperson Rahat Kaunain and member Vadiyya Khalil passed the order.

“DHA has in writing admitted that the agreement violated the Act and showed its willingness to modify the agreement in accordance with the law,” said Competition Commission of Pakistan (CCP) chairperson Rahat Kaunain while announcing the verdict.

The CCP has reprimanded that continued breach of the Act would entail serious consequences, said Kaunain adding that the parties will have to pay a maximum penalty of Rs1 million every day if the violation continues.

However, the telecom service provider argued that the arrangement between the company and DHA did not have the effect of restricting other service providers within the DHA area, informed Kaunain.

The watchdog body initiated proceedings following complaints from residents of DHA, regarding lack of choice of service providers for provision of telecommunication and media services and unsatisfactory quality of such services.

During the course of the hearings, CCP identified two broad categories within telecommunication and media services markets under the agreement. One being telecommunication and media services provider through HFC fixed line network while the other being those provided through wireless technology.

It concluded that due to the inherent nature of the services provided by using wireless technology, no service provider could be excluded from DHA region. However, exclusivity granted restricted other service providers to provide telecommunication and media services through fixed line.

Responding to a question, the CCP chairperson said the Jute Mills Association has paid Rs 16 million fines out of Rs23 million slapped for making a cartel. Rahat said the anti-trust watchdog has been relying on the government to run its affairs, which is hampering its affairs and undermining autonomy.

She urged other regulators to pay three per cent of their penalties and fees to the CCP, as the law requires. Regulators like Oil and Gas Regulatory Authority, Pakistan Telecommunication Authority, Pakistan Electronic Media Regulatory Authority and Securities and Exchange Commission of Pakistan have been unlawfully withholding payments for the last four years.

Inquiry against state-owned channel

The anti-trust watchdog has also initiated an internal inquiry against the state-owned Pakistan Television Network for charging Rs35 per month television fee from the electricity consumers through monthly utility bills.

The chargers are irrespective of the fact that a person is using a cable TV service or exclusively relying on Pakistan Television setup. The inquiry is at the stage of determining the legality of the charges. If the CCP finds that PTV management is violating consumers’ rights, it will issue a show cause notice. The network has been charging the fee since 2004 and earning billions of rupees every year.

Published in The Express Tribune, March 23rd, 2011.