CCP seeks comments for PTCL-Telenor merger

Extensive analysis underway to assess impact on competition, consumer welfare

ISLAMABAD:

The Competition Commission of Pakistan (CCP) is conducting an extensive analysis, collecting detailed data, in which market participants respond through comprehensive questionnaires and comments from the Pakistan Telecommunication Authority (PTA) on the proposed PTCL-Telenor Merger, according to a statement released on Saturday.

As part of its assessment, CCP will also evaluate efficiencies claimed by the merging entities, which must be beneficial to consumers, reads the statement. Currently, CCP is conducting a Phase-II review of the proposed acquisition of Telenor Pakistan by Pakistan Telecommunication Company Limited (PTCL). This crucial review will determine whether the merger is approved and what conditions may be imposed to ensure competitive fairness in the market.

Notably, PTCL filed a pre-merger application on March 6, 2024. In accordance with the competition law, the CCP had 30 days to review the application and issue a Phase-I order. This Phase-I order was announced on May 3, 2024, within the timescale specified in the competition law. It is analysed that there may be some potential impact on competition in the telecom sector, prompting the pre-merger application to be considered in a Phase-II review. The CCP now has 90 days to complete this detailed review and issue its order.

During the Phase-II review, the CCP will conduct an in-depth investigation into the merger’s potential impact on market competition. This stage is initiated when preliminary findings suggest that the merger could restrict competition in the telecom sector.

The possible outcome of a Phase-II review is often “conditional” approval. Historically, the CCP has approved mergers with some structural and behavioural modification, imposing some conditions attached to mitigate anti-competitive effects and to protect consumers from abuse of dominant positions.

Published in The Express Tribune, May 19^th, 2024.

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