ISLAMABAD: The government has requested the Competition Commission of Pakistan (CCP) to review the proposed merger between Telenor Pakistan and PTCL ahead of the upcoming spectrum auction, State Minister for Information Technology and Telecommunication Shaza Fatima Khawaja informed the National Assembly on Friday.
Responding to a query, she said that the CCP was conducting a comprehensive review of the merger, and the government had urged the commission to expedite its decision to help stakeholders plan their future strategies. The spectrum auction was expected to take place by mid-year.
She highlighted the government’s efforts to attract investment in the telecom sector, including a public consultation process initiated by the Pakistan Telecommunication Authority (PTA) on the draft Fixed Satellite Services (FSS) licence, inviting feedback from stakeholders.
Meanwhile, Parliamentary Secretary for Finance and Revenue Saad Waseem Sheikh informed the House that PTCL had submitted a pre-merger application to the CCP seeking approval for the acquisition of Telenor Pakistan’s 100 percent shareholding.
The application, filed under Section 11 of the Competition Act, 2010, and Regulation 6 of the Merger Control Regulations, 2016, had initiated the commission’s review process.
Saad Waseem Sheikh noted that the CCP had completed Phase I of the review and flagged concerns regarding substantial competition reduction in the telecom sector. As the process moved into Phase II, the commission faced challenges in assessing market dominance, increased market concentration, and competition-related risks.
The house was informed that during the review, the CCP had encountered difficulties in obtaining relevant financial data from PTCL, particularly regarding transactions between PTCL and Ufone, as the company did not provide separate financial accounts to the PTA. This lack of transparency had raised concerns about potential cross-subsidisation, necessitating further scrutiny.
Additionally, PTCL’s unique integrated license, which allowed it to provide a full range of telecommunication services, had been cited as a factor that could create an uneven playing field for competitors.
This had intensified competition concerns and prompted the commission to undertake a detailed analysis.
The parliamentary secretary assured the house that the CCP’s assessment remained inclusive, with all stakeholders given ample opportunity to present their submissions.
To address market concentration and prevent dominance abuse, the commission was considering regulatory interventions, including the fair allocation of spectrum to ensure that PTCL did not gain an undue advantage in coverage and service quality post-merger.
Published in Dawn, February 15th, 2025
