The Competition Commission of Pakistan (CCP) on Wednesday approved the much-awaited acquisition of mobile services company Telenor by Pakistan Telecommunication Company Limited (PTCL) after a long wait of 18 months.
"This is one of the most complicated transactions in the entire world," CCP Chairman Dr Kabir Ahmed Sidhu remarked while announcing the approval of PTCL-Telenor merger. He elaborated that strict conditions had been attached to the deal to discourage the creation of a monopoly and to avoid anti-competitive practices.
The CCP has approved the acquisition of 100% shareholding in Telenor Pakistan and Orion Towers by PTCL, subject to extensive conditions designed to preserve competition, ensure non-discriminatory access and secure the pass-through of efficiencies to consumers.
The order was announced at a press conference held at the CCP head office. Chairman Sidhu, Member Salman Amin, Registrar Shahzad Hussain and Head of Legal Ambreen Abbasi shared key highlights.
They explained that the CCP conducted a comprehensive review of the merger transaction, during which it examined market structure, concentration levels, efficiencies and potential competition risks.
"We can revoke the PTCL-Telenor merger, in case we see anti-competitive practices and violation of conditions," CCP Member Salman Amin cautioned, adding that these companies would manage separate accounts to avoid cross-subsidy.
At present, PTCL is absorbing all losses of its subsidiary Ufone, which has also pushed PTCL into losses.
Despite stringent conditions, the merger casts a shadow over the telecom industry as PTCL has dragged the Pakistan Telecommunication Authority (PTA) – the regulator – into litigation.
Responding to a query about litigation in the future to challenge an order of the CCP, Chairman Sidhu ruled out any such possibility.
"PTCL has accepted all conditions and therefore it has given an undertaking that it will comply with all conditions pertaining to the deal," he said, adding that PTCL would have to submit a report to comply with the order.
He revealed that the CCP would continue to monitor the situation for five years. "By that time, other telecom operators will become used to market practices."
Sidhu emphasised that the commission's decision ensures a level playing field for all telecom operators and safeguards consumer interests. He noted that the merger aims to enhance service quality, expand product offerings and accelerate technological innovation, including the rollout of 5G.
He stated that the CCP studied various international precedents, including orders from the United States, the United Kingdom and the European Union, before granting approval.
Senior Legal Adviser Ambreen Abbasi explained that their assessment considered possible lessening of competition in the relevant sub-markets, market shares and efficiency claims. She underlined that the merger was approved conditionally, with safeguards designed to prevent anti-competitive conduct.
Key conditions imposed include separate management and governance: PTCL and the merged entity must maintain separate boards and independent management structures.
Leadership standards: CEOs and senior management must meet strict competency and integrity requirements, with Etisalat – the PTCL parent – ensuring professional leadership.
Independent third-party reviewer: To monitor compliance, audit transactions, and submit quarterly reports to the CCP for five years. Related party transactions & cross-subsidisation: Prohibited unless conducted competitively and at arm's length.
Interconnection & infrastructure sharing: Non-discriminatory access to capacity and infrastructure for all operators. PTCL and MergeCo shall submit all their existing and future reference interconnect offers (RIO) to the PTA for approval. PTCL shall offer interconnection to all operators in accordance with RIO as approved by the PTA.
Prohibition on price discrimination: PTCL shall seek PTA's approval for its wholesale pricing structure in relation to IP bandwidth service, LDI (Long Distance International) service, Domestic Leased Line services and telecom infrastructure services provided to PTA licensees as well as associated companies including MergeCo. PTCL shall not set predatory retail prices.
Consumer protection & innovation: Mandatory compliance with service quality standards, innovation policies and PTA tariff approvals.
Efficiency substantiation: PTCL and the merged entity must demonstrate that claimed efficiencies are passed on to consumers through better services, pricing and infrastructure investments.
Under the divestiture clause, the CCP reserves the right to direct the divestiture of assets or business segments in case of future violations.
CCP Member Salman Amin added that the conditions were specifically aimed at preventing favoritism, predatory pricing and barriers to market entry, while ensuring continued regulatory oversight by the CCP and the PTA.
"We appreciate the Competition Commission of Pakistan's careful consideration before granting approval to the sale of Telenor Pakistan to PTCL. We believe this transaction would strengthen Pakistan's telecom sector," said Telenor Asia in remarks released after the merger.
"This CCP approval is a significant milestone in the process, which will now move forward for approval by the Pakistan Telecommunication Authority. We look forward to the timely approval process and final completion of the transaction soon. Telenor Pakistan will continue its business as usual, focusing on delivering services to its 43 million customer base," it said.
"Congratulations to PTCL on receiving CCP's approval for the acquisition of Telenor Pakistan. Consolidation can make the telecom industry more sustainable by ensuring resources are invested in expanding services rather than duplicating networks," said Jazz CEO Aamir Ibrahim. "Now, the real priority should be timely spectrum release, which is essential to unlock Pakistan's digital growth and ensure millions of people benefit from faster, more affordable connectivity."
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