The Competition Commission of Pakistan (CCP) has concluded its 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 is one of the largest mergers in Pakistan’s telecom sector, involving both vertical and horizontal market expansions.
Sources indicated that CCP officials are expected to meet with PTCL management next week. The deal, which includes PTCL’s acquisition of Telenor Pakistan’s mobile and broadband services along with Orion Towers’ infrastructure, has drawn significant attention from telecom industry stakeholders, who are closely evaluating its potential impact.
The CCP conducted a thorough and rigorous review of the transaction, holding multiple hearings throughout September and October 2024 to assess the merger’s impact. Chaired by Dr. Kabir Ahmed Sidhu, the Commission engaged with various stakeholders, including telecom industry players, to evaluate the implications on market dynamics and competition. Its main aim is to improve market efficiency while ensuring fair competition and protecting consumer interests.
During the review, the CCP closely examined the deal’s impact on several key telecom submarkets, including Long Distance and International (LDI), Local Loop Operators (LLO), Telecom Infrastructure, Mobile Network Operators, and domestic leased lines and IP bandwidth. The merger will significantly shift market shares in various sectors. PTCL, which currently holds 50.5% of the retail LDI and fixed-line market, is set to control 61% of the LDI market post-merger. In the mobile telecommunications sector, PTCL’s Ufone, which holds a 12.4% share, will combine with Telenor’s 24% share, resulting in a new entity with a 37% market share. Additionally, PTCL will dominate the wholesale IP bandwidth and domestic leased lines markets, holding 68% and 42.7% of the respective sectors.
CCP Chairman Dr. Sidhu emphasized that the Commission’s primary concern is to prevent any anti-competitive effects that could harm consumers. The Commission has been evaluating the merger from both a legal and economic standpoint, focusing on market health, consumer impact, and long-term competition within Pakistan’s telecom sector.
While PTCL has strongly supported the merger, arguing that it will promote greater competition, infrastructure investment, and service quality, some telecom operators have raised concerns. Wateen Telecom has warned that the merger could stifle competition in key infrastructure markets such as Long Haul IRU Services and Co-location Services, and lead to customer foreclosure, particularly in the inbound voice services market.
Jazz (PMCL) has expressed conditional support, calling for regulatory safeguards to ensure that PTCL’s enhanced market power does not negatively affect consumers. Jazz is particularly concerned about the merger’s potential to increase PTCL’s market share, especially in underserved regions like Azad Jammu and Kashmir and Gilgit-Baltistan, where consumer choice is already limited.
CM Pak (Zong) has raised concerns over spectrum concentration, with the possibility that the merged entity could control up to 34.4% of the total spectrum in the retail mobile market. Zong cautioned that this could give the new entity an unfair advantage in coverage and service quality, particularly in underserved areas.
The CCP’s final decision will hinge on maintaining robust market competition to benefit consumers and the broader economy. While the merger is set to strengthen PTCL’s market position, it could also create new opportunities for investment and contribute to improving Pakistan’s digital infrastructure and network coverage.
