CCP finishes Telenor merger review

Report to be finalised next week; merger unlikely to cause market distortion

ISLAMABAD:

The Competition Commission of Pakistan (CCP) has almost completed the first phase review of a merger under which Pakistan Telecommunication Company Limited (PTCL) is taking over operations of Telenor Pakistan. It is likely to finalise a report by next week.

Sources said that different teams of the CCP had obtained almost all the required documents from relevant stakeholders and their analysis was likely to be completed by March 30.

Under the Competition Act, 2010, the phase-I review of a merger is completed in 30 days after the acceptance of an application and the basic criterion for the phase-I review is to determine whether the merger is strengthening a dominant position.

PTCL holds 100% stake in Ufone and the merger of PTCL/ Ufone and Telenor Pakistan is less likely to cause market distortion in the cellular landscape of Pakistan.

According to data compiled by the Pakistan Telecommunication Authority (PTA), Telenor Pakistan is the third largest mobile telecom company with 44.78 million subscribers while Ufone is at the fourth spot having 25.28 million subscribers.

While their collective subscriber base will widen to 70.06 million, the largest player in Pakistan is Jazz with 70.95 million subscribers, or 37.31% of the total market share.

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On the other hand, the collective share of Ufone and Telenor will be 36.84% of the total subscribers.

The second position in the current scenario is held by Zong Pakistan with 47.40 million subscribers but after the completion of merger formalities, it will drop to the last place among three cellular mobile operators in Pakistan.

The government of Pakistan has the largest shareholding of 62% in PTCL while 26% shares along with management rights are held by ‘e&’ of the UAE telecom operator Etisalat.

After lengthy and secretive talks, which were mostly held outside Pakistan, the management of e& entered into a deal in December 2023 with the management of Telenor for taking over all interests of Telenor in the country.

The CCP conducted the phase-II review from February 12, 2016 to March 9, 2016, when Jazz acquired Warid Telecom, putting itself in a dominant position.

Meanwhile, a senior official of Ufone emphasised that the CCP could initiate the phase-II review based on certain conditions like any complaint from the remaining two telecom operators and to ensure transparency in the process.

The phase-II review is a 90-day process and is conducted if a merger significantly reduces competition by creating or strengthening a dominant position.

The CCP’s phase-II review of the formal merger between PTCL/ Ufone and Telenor Pakistan will be held after the start of next fiscal year in July.

At the same time, the Ufone-Telenor merger will meet other thresholds for the phase-II review, which include combined assets of more than Rs1 billion for the merging parties and their combined revenue surpassing Rs1 billion.

Published in The Express Tribune, March 23^rd, 2024.

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