The Competition Commission of Pakistan (CCP) has finalized its Phase-II review of PTCL’s acquisition of Telenor Pakistan Pvt Ltd and Orion Towers Pvt Ltd, marking one of the telecom sector’s most significant mergers, valued at $400 million.
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The deal involves vertical and horizontal market integration, with PTCL set to acquire Telenor’s mobile and broadband services alongside Orion Towers’ infrastructure assets. The CCP conducted rigorous scrutiny through multiple hearings held during September and October 2024, consulting stakeholders across the telecom sector to assess the merger’s potential impacts on market dynamics, competition, and consumer interests.
Sources reveal that CCP officials plan to meet PTCL’s management next week to finalize discussions. The Commission, led by Chairman Dr. Kabir Ahmed Sidhu, emphasized maintaining market efficiency, ensuring fair competition, and safeguarding consumer welfare.
Market Impact: The merger is set to reshape Pakistan’s telecom landscape:
- PTCL’s control in the Long Distance and International (LDI) market will rise from 50.5% to 61%.
- In mobile telecommunications, Ufone’s 12.4% share will merge with Telenor’s 24%, forming a combined market share of 37%.
- PTCL will also dominate wholesale IP bandwidth (68%) and domestic leased lines (42.7%).
Stakeholder Concerns: Telecom players raised various concerns during CCP hearings:
- Wateen Telecom warned of reduced competition in infrastructure markets like Long Haul IRU Services and Co-location Services, fearing customer foreclosure.
- Jazz (PMCL) conditionally supported the merger but demanded regulatory safeguards against market power abuse, particularly in underserved areas like Azad Jammu and Kashmir and Gilgit-Baltistan.
- Zong (CM Pak) flagged potential spectrum concentration issues, as the new entity could control up to 34.4% of the retail mobile market’s spectrum, creating an imbalance in coverage and service quality.
PTCL’s Defense: PTCL argued that the merger would spur investment in infrastructure, improve service quality, and enhance competition. The company assured the CCP that the deal aligns with consumer and market interests.
Looking Ahead: While the CCP’s decision is pending, officials indicate that the merger could significantly enhance Pakistan’s digital infrastructure and network coverage. However, the Commission remains committed to ensuring robust competition to protect consumer interests and promote economic growth.
