The Competition Commission of Pakistan (CCP) is set to announce its decision regarding the Pakistan Telecommunication Company Limited (PTCL) acquisition of Telenor Pakistan Pvt Ltd and Orion Towers Pvt Ltd, with a focus on addressing concerns related to competition and dominance in the market.
Salman Amin, Member of the Office of Fair Trade, Cartels & Office of International Affairs at CCP, shared this update during an appearance on Aaj TV’s program “Paisa Bolta Hay with Anjum Ibrahim.” He confirmed that while the formalities for the Phase-II review have been completed, some information from PTCL is still awaited before the final decision is made.
The Phase-II review of the PTCL acquisition of 100% shareholding in Telenor Pakistan and Orion Towers is in its final stages. The CCP’s mandate is to promote fair competition across all sectors of the economy, and in cases of mergers and acquisitions, the commission assesses whether such moves may harm market competition.
Amin stressed that this acquisition is significant, especially within the telecommunications sector, and the case should not be compared to the merger of Jazz and Warid, as it presents unique considerations. Under Pakistani law, merger cases that don’t involve a risk of dominance abuse are cleared in Phase-I, but cases that carry potential risks are taken to Phase-II for more thorough investigation.
The Phase-II review delves deeper into various factors, including the impact on stakeholders, competitors, and market conditions, ensuring that all relevant parties have an opportunity to provide input. With a transaction value around $500 million, the economic impact could potentially reach billions of dollars in the long term.
Amin noted that, given the significant market player status of PTCL and the complexities of the case, the commission has paid careful attention to relevant sector laws. While PTCL’s dominant market position is not necessarily problematic, the risk of abuse of dominance is a primary concern for the CCP.
Amin further explained that the CCP is evaluating the merger in light of its potential impact on competition and has been cautious in the process, considering ongoing developments in the sector. He assured that the decision will take into account the concerns raised during the hearings, as well as any remedies necessary to mitigate adverse effects.
Addressing a question on the Pakistan International Airlines (PIA) privatization, Amin mentioned that the lack of proper due diligence from the government, the seller, led to the failure of the transaction. He emphasized that due diligence in areas such as corporate affairs, legal affairs, HR, loan positions, and contingencies is critical for the success of such deals. He recommended that a more thorough and strategic approach be taken for future PIA privatization efforts to ensure its success.
