The Competition Commission of Pakistan (CCP) has raised red flags over Pakistan Telecommunication Company Limited’s (PTCL) financial muscle to fund the proposed Telenor-Pakistan merger, grilling the Etisalat-owned operator on its losses, shady reporting practices, and vague investment promises.
Read More: Ufone in Hot Seat — Govt Shadows, Heavy Losses & Spectrum Delays Push Operator to the Brink
Officials confirmed that the regulator has asked PTCL to categorically state whether Etisalat (operating under the “e&” brand) is willing to inject equity to rescue its floundering Pakistani arm and Ufone. So far, PTCL’s replies have been generic, evasive, and short on facts — prompting regulators to question whether the company is even capable of handling a merger of this scale.
CCP Slams PTCL’s Shaky Business Plan:
The CCP has demanded a concrete business plan for the merged entity, including binding commitments for capital expenditure and participation in the upcoming 5G spectrum auction. But PTCL, mired in sustained losses, has failed to provide clarity on where the money will come from. Industry sources note that without direct equity infusion from Etisalat, PTCL is in no position to finance new investments.
Both PTCL and Ufone continue to bleed financially, yet the company’s responses suggest an overreliance on vague “bank loans” or undisclosed funding sources. Regulators fear this strategy risks leaving the entire telecom sector weaker rather than stronger.
Shady Financial Disclosures Raise Alarm:
Beyond financing, the CCP has openly criticized PTCL’s corporate practices and disclosure standards. Among the red flags:
- Ambiguous Revenues: PTCL’s reports feature suspicious categories like “Other Core Products” with significant revenues but no supporting volume or pricing data.
- IDD & Tariffs: PTCL was unable to provide exact traffic volumes or rate comparisons with Jazz, Zong, and Telenor for 2022–2024, raising transparency concerns.
- Preferential Treatment to Ufone: PTCL disclosed detailed per-Mbps and colocation rates for Ufone but offered only vague averages for rivals — a move regulators see as discriminatory.
- Transfer Pricing Gaps: Missing data on inter-company transactions and allocation of infrastructure costs cast serious doubt on how PTCL books its revenues.
The Commission bluntly noted that PTCL’s incomplete disclosures and selective data undermine transparency, fairness, and trust in the telecom market.
Etisalat’s Track Record in Pakistan:
Adding to skepticism, analysts point out Etisalat’s long history of dragging its feet in Pakistan. The UAE giant still owes billions to the government from the original PTCL privatization deal and has consistently stalled on investment commitments. The latest CCP scrutiny suggests regulators are unwilling to rubber-stamp another deal unless Etisalat itself puts hard cash on the table.
Merger in Jeopardy:
The PTCL-Telenor merger, touted as an industry game-changer, now faces the real risk of delays or heavy conditions. Without binding equity commitments, transparent reporting, and competitive neutrality, experts warn the merger could collapse — leaving Pakistan’s telecom landscape further destabilized.
In its closing remarks, the CCP emphasized that PTCL must stop hiding behind half-truths and prove it has the financial muscle, not just the ambition, to execute this merger. Until Etisalat steps up with real investment guarantees, the regulator signaled, approval will not come easy.
