The Competition Commission of Pakistan (CCP) has finalized all formalities for the Phase-II review of Pakistan Telecommunication Company Limited’s (PTCL) acquisition of 100% shareholding in Telenor Pakistan Pvt Ltd and Orion Towers Pvt Ltd.
Valued at $400 million, this transaction represents one of the largest mergers in Pakistan’s telecom sector, encompassing both vertical and horizontal market expansions.
Sources informed Business Recorder that CCP officials are expected to meet PTCL’s management next week. PTCL’s acquisition includes Telenor’s mobile and broadband services as well as Orion Towers’ infrastructure assets. The deal has garnered significant attention across the telecom industry, with stakeholders analyzing its potential impact.
The CCP conducted a rigorous review of the transaction, holding multiple hearings in September and October 2024 to assess its implications. Chaired by Dr. Kabir Ahmed Sidhu, the Commission engaged with stakeholders, addressing their concerns while evaluating the merger’s effect on market dynamics. The CCP’s objective is to enhance market efficiency, safeguard competition, and protect consumer interests.
The detailed review focused on the transaction’s impact across key telecom submarkets, including Long Distance and International (LDI), Local Loop Operators (LLO), telecom infrastructure, mobile network operations, and domestic leased lines and IP bandwidth.
During open hearings, it was revealed that the merger could significantly alter market shares across several sectors. For instance, PTCL, which currently holds 50.5% of the retail LDI fixed-line market, is projected to control 61% post-acquisition. In mobile telecommunications, PTCL’s Ufone (12.4%) will combine with Telenor’s 24% share, creating an entity with 37% of the market. Similarly, PTCL is expected to dominate wholesale IP bandwidth and domestic leased lines, controlling 68% and 42.7% of these markets, respectively.
CCP Chairman Dr. Sidhu emphasized that the Commission’s primary focus is to prevent anti-competitive outcomes that could harm consumers. The merger is being evaluated from legal and economic perspectives, considering overall market health, consumer benefits, and the long-term effects on competition.
While PTCL has defended the merger, citing benefits such as increased competition, infrastructure investment, and improved service quality, other telecom operators have voiced concerns.
Wateen Telecom highlighted the potential for anti-competitive practices, particularly in infrastructure markets such as Long Haul IRU Services and Co-location Services. It warned that PTCL’s dominance might lead to customer foreclosure, limiting competitors’ access to critical services, especially in inbound voice markets. Jazz (PMCL) conditionally supported the merger but urged regulatory safeguards to prevent excessive market power that could disadvantage consumers. Jazz specifically noted concerns about market share concentration in regions like Azad Jammu and Kashmir and Gilgit-Baltistan, where consumer choices are already limited.
CM Pak (Zong) raised concerns about spectrum concentration, warning that the merged entity could control up to 34.4% of the total retail mobile market spectrum. This, Zong argued, could result in an unfair advantage in terms of coverage and service quality, particularly in underserved areas.
The CCP’s final decision will focus on maintaining robust competition to protect consumers and support broader economic growth. While the merger is set to strengthen PTCL’s market position, it also holds the potential to attract new investments, enhance digital infrastructure, and improve network coverage nationwide, officials added.
