Islamabad — Pakistan Telecommunication Company Limited (PTCL) is preparing to convince the Competition Commission of Pakistan (CCP) of its $1 billion investment plan in a critical hearing scheduled for Wednesday, seeking approval for its pending merger with Telenor. The merger application has been under review for nearly a year, delayed by outstanding regulatory queries and incomplete documentation from PTCL.
PTCL officials stated that the CCP raised concerns about the details and timelines of the proposed investments, which the telecom company aims to address during the hearing. The merger’s approval depends on PTCL’s ability to satisfactorily respond and demonstrate commitment to the investment plan.
The issue is complicated by unresolved outstanding privatization payments of $800 million. Although a prior settlement between the previous government and PTCL’s management agreed on releasing $640 million, PTCL has not fulfilled this payment. Additionally, a land dispute between the Pakistani government and UAE-based Etisalat—the majority stakeholder in PTCL—remains unresolved, yet PTCL has begun selling prime land assets. The National Assembly Standing Committee on IT has expressed serious concerns over this and warned of potential action.
During the CCP’s second-phase review, it requested market position data from the Pakistan Telecommunication Authority (PTA) to ensure the merger will not negatively affect competition or create dominant market power. However, PTA noted that PTCL challenged regulatory notices in the Sindh High Court instead of addressing objections. PTCL initially submitted its merger application on February 29, 2024, with rectifications made on March 6.
Financially, PTCL’s situation remains fragile. According to the Ministry of Finance’s biannual report for July-December FY25, PTCL incurred a loss of Rs7.2 billion during this period, increasing accumulated losses to Rs43.6 billion and elevating PTCL’s rank among loss-making state-owned enterprises from 10th to 7th. The finance ministry cautioned that acquiring Telenor could further destabilize PTCL’s finances, potentially impeding digital transformation goals and restricting investments in core growth areas. Outstanding pension liabilities stand at Rs42.84 billion.
PTCL last posted a net profit of Rs20.78 billion in FY06, coinciding with Etisalat acquiring a 26% stake while the Pakistani government retains 62%, and public investors hold the remaining 12% through the stock market.
