CCP Reviews PTCL-Telenor Merger Impact on Telecom Market

The Competition Commission of Pakistan (CCP) is currently engaged in a critical Phase II Merger Review concerning PTCL’s proposed acquisition of Telenor Pakistan (Private) Limited and Orion Towers Private Limited. This merger, if approved, would see PTCL acquire 100 percent of Telenor's shares, a move that has sparked significant discussions about its potential impact on the telecom market in Pakistan.

During the recent hearing, CCP Chairman Dr. Kabir Ahmed Sidhu led the proceedings, accompanied by members Mr. Salman Amin and Mr. Abdul Rashid Sheikh. The session featured contributions from various stakeholders, including Mian Sami-ud-Din, a partner at BNR counsel representing Wateen Telecom Limited. He urged the Commission to thoroughly evaluate the competition dynamics within specific sub-markets, such as Indefeasible Right of Use (IRU), tower colocation, and the fiberization of towers. His emphasis was clear: all aspects of competition that could be influenced by the merger must be taken into account.

Jazz Telecom’s counsel, Khalid Ibrahim, raised concerns about the potential for PTCL to gain a dominant market position through this acquisition. He argued that the Commission should impose both pre-merger and post-merger conditions to safeguard competition. These conditions could include allowing other mobile operators to roam on PTCL’s network under mutually negotiated terms. Furthermore, he suggested that PTCL should be required to provide wholesale, non-discriminatory access to other operators, ensuring fair terms for active infrastructure, fiber, and spectrum sharing and trading.

In contrast, PTCL’s legal representatives, including Senior Counsel Ms. Rahat Kaunain Hassan and Mustafa Munir Ahmed from Legal Oracles, defended the merger by highlighting its potential benefits. They argued that the merger could lead to greater efficiency, economies of scale, and advancements towards a Digital Pakistan by transforming the IT ecosystem.

The bench posed important questions to the representatives of PTCL, Wateen Telecom, and the Pakistan Telecommunication Authority (PTA), seeking clarity on the merger's potential impact and relevant statutory regulations. In a bid to facilitate a comprehensive review, the CCP has requested additional data and information from PTCL and Telenor.

The hearing is set to continue for its third day on Thursday, October 3, 2024. Given the intricate nature of the telecom market, the CCP is dedicated to ensuring that any merger outcomes are beneficial for Pakistan’s telecom landscape while addressing the concerns of all stakeholders involved.

As the telecom sector continues to evolve, the implications of this merger could be far-reaching. It is essential for the CCP to strike a balance between fostering competition and allowing for growth and innovation within the industry. The outcome of this review will not only shape the future of PTCL and Telenor but also influence the overall landscape of telecommunications in Pakistan.