PTCL-Telenor Merger Future Under Shadow of Distrust

The lack of trust on the part of Pakistan Telecommunication Company Limited (PTCL) has cast a shadow over the future of the PTCL-Telenor merger deal.

Etisalat, which owns shareholding and has management control, has a history of distrust as it has not paid $800 million in dues which were part of the privitisation deal.CCP Chairman Announces PTCL Telenor Merger

The Pakistani administration has made a lot of efforts, but Etisalat has not responded and did not paid these dues on the properties. Rather, it started selling properties that had raised controversy. 

In another issue, PTCL management had obtained a stay order against the telecom regulator, Pakistan Telecommunication Authority (PTA).

The question was raised during a press conference here, conducted by the Competition Commission of Pakistan (CCP), which announced formal approval of the PTCL-Telenor merger after 18 months.

“ This is one of the most completed transactions in the entire world,” CCP chairman Dr. Kabir Ahmed Sidhu said while announcing the approval of the  PTCL Telenor Merger by the CCP.

He said that strict conditions were attached to this deal to discourage monopoly and anti-competitive practices.  

We can revoke the PTCL Telenor merger in case we see anti-competitive practices and violations of conditions.”  Member CCP Salman Amin said, adding that these companies will also manage separate accounts to avoid cross-subsidy.

At present, PTCL is absorbing all losses of Ufone, its subsidiary, which has also dragged PTCL into losses as well.

Despite all the strict conditions, the shadow on the PTCL Telenor merger deal still remains, as PTCL had dragged PTA into litigation.

While responding to a query regarding litigation in the future against any order of the CCP, the Chairman of the CCP ruled out any such incident. 

“PTCL has accepted all conditions and therefore gave an undertaking to comply with all conditions relating to the deal,” he said, adding that PTCL will have to submit a report to comply with the order, and CCP will continue monitoring for the five years. “Till that time, other telecom operators will become used to market practices,” he said. 

The CCP has approved the acquisition of 100% shareholding of Telenor Pakistan (Pvt.) Ltd. and Orion Towers (Pvt.) Ltd. by Pakistan Telecommunication Company Limited (PTCL), subject to extensive conditions designed to preserve competition and ensure non-discriminatory access and secure the pass-through of efficiencies to consumers.

The order was announced on Wednesday at a press conference held at the CCP’s head office. CCP Chairman Dr. Kabir Ahmed Sidhu, Member Salman Amin, Mr Shahzad Hussain, Registrar CCP, and Head of Legal Ms. Ambreen Abbasi shared the key highlights. They explained that the CCP conducted a comprehensive review of the merger transaction. The review examined market structure, concentration levels, efficiencies, and potential competition risks.

Speaking on the occasion, CCP Chairman Dr. Kabir Ahmed Sidhu emphasized 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 further stated that CCP studied various of international precedents, including orders from the United States, United Kingdom, and European Union, involving similar transactions before granting approval.

Senior Legal Advisor Ms. Ambreen Abbasi explained that the 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 & 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 ensuring professional leadership.

Independent Third-Party Reviewer (TPR): To monitor compliance, audit transactions, and submit quarterly reports to CCP for five years.  Related Party Transactions & Cross-Subsidization: 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 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 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.

Efficiencies 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, CCP reserves the right to direct divestiture of assets or business segments in case of future violations.

Member CCP, Mr. Salman Amin, added that the conditions are specifically aimed at preventing favoritism, predatory pricing, and barriers to market entry, while ensuring continued regulatory oversight by CCP and PTA.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *