PTCL Lapses Stall $1B Ufone–Telenor Merger: CCP
The Competition Commission of Pakistan (CCP) has tabled a set of failures of PTCL, which have halted its merger with Telenor.
PTCL has failed again to submit a one billion dollar investment plan in order to pave the way for the Ufone and Telenor Merger.
According to documents submitted to the Senate Standing Committee on IT, CCP has revealed that PTCL did not submit its investment plans in relation to Efficiency to be created by the proposed merger (Section 11 (10)) in a timely manner.PTCL Duplicate Bill Download 2023| How To Pay PTCL Bill?
The regulator further said that PTCL has challenged most of PTA’s regulations in the Courts and obtained Stay Orders, such as SMP determination is challenged and therefore RIO approval from PTCL is not applicable, which means that PTA has no check on the tariffs/rates charged by PTCL to different telecom operators.
“Non-compliance with the Separate Accounting Requirement applicable to Ufone and PTCL, which means there is potential risk of cross-subsidization,” the anti-cartelization merger said.
PTCL was issued an LDI license, and Ufone was issued a CMO license, but both have joint management. It creates competition concerns in relation to cross-subsidization. PTCL took considerable time to provide this information.
PTCL History of Abusing Dominating Position
PTCL is a dominant player in the upstream and downstream business segments of the telecom market. Separate accounts provided to CCP were in a highly technical format with multiple missing links. CCP wanted to rule out any preferential treatment to ensure a level playing field. PTCL took considerable time in providing the required information.
PTCL abuses its dominant position. It has a history of collusive practices. For example, PTCL along with 13 undertakings, was penalized for anti-competitive practices in the ICH case, where each LDI operator was penalized. The said order of the Commission was upheld by CAT on 11.08.2025. The Commission has recovered a penalty of Rs70 million so far. Therefore, it was imperative to ensure detailed scrutiny.
PTCL has not been able to run Ufone successfully. Ufone has been consistently in losses. This fact necessitated the CCP to analyze the transaction in detail.
Impact of Merger on Telecom Sector
Mergers in the telecom sector hold immense strategic importance, driving economic growth, enhancing connectivity, and fostering technological innovation.
CCP said that the PTCL Transaction may generate efficiencies.PTCL Transaction, however, raises serious competition concerns.
Consolidation will strengthen PTCL’s already dominant position and create a new, highly concentrated mobile market player (MergeCo). It has also pointed out the risk of Substantial Lessening of Competition (SLC).
A transaction could magnify entry barriers, reduce competitive pressures, and ultimately restrict consumer choice and innovation, and the promised gains/efficiencies from the merger may not be realized.
Current Status
The Commission under Section 11(11) of the Competition Act has the following options, which prohibit the consummation of the transaction.
CCP has to approve such a transaction, subject to the conditions laid by the Commission in its order. It also has an option to approve such a transaction on the condition that the said undertakings enter into legally enforceable agreements specified by the Commission in its order.