Can PTCL’s $1 Billion Investment Plan Save Its Telenor Merger?

Can PTCL’s $1 Billion Investment Plan Save Its Telenor Merger? Let’s hope for the best in favour of PTCL. The company is trying to win over the Competition Commission of Pakistan (CCP) to approve its long-delayed merger with Telenor. The company is facing growing losses but hopes a fresh investment plan will help clear the way for the deal.

PTCL wants to merge with Telenor Pakistan to expand its market share and strengthen its position in the telecom sector. To do this, PTCL has shared an investment plan worth $1 billion with the regulator. The company says this investment will help boost the telecom industry and address any concerns about competition.

Can PTCL’s $1 Billion Investment Plan Save Its Telenor Merger?

A team from PTCL will appear before the CCP on Wednesday. They will answer questions about the plan and try to convince the authority that the investment will benefit customers and the sector as a whole. However, the merger has faced hurdles for almost a year now. The CCP wants more documents and clear timelines from PTCL about how and where the money will be spent.

According to government officials, there is also an old issue that adds to the complications. PTCL still owes $800 million in unpaid privatisation dues. Years ago, UAE-based Etisalat bought a 26% stake in PTCL when the company was privatised. At that time, PTCL promised to clear some land issues, but disputes remain. Because of this, Etisalat has held back the final payment. Although a settlement was agreed with the previous government for a partial payment of $640 million, it has not been paid yet.

The company has even started selling its prime land in Pakistan, which has angered some lawmakers. On Monday, the National Assembly Standing Committee on IT expressed its disappointment over PTCL’s actions. Committee members warned PTCL against selling more land until the issue is fully settled.

The CCP is also concerned about how this merger might affect market competition. It asked the Pakistan Telecommunication Authority (PTA) for details on PTCL’s current position in the market. The CCP wants to make sure that the merger does not create a monopoly or hurt competition for other telecom players.

See Also: PTCL Group’s Big Plans Face Hurdles Amid Telenor Deal

Instead of addressing all objections, PTCL challenged some CCP notices in court. The company first submitted its merger request on February 29, 2024, but some flaws delayed the process. These errors were fixed in early March, but the approval is still pending.

Financial reports add more worry to the situation. According to the Finance Ministry’s biannual report, PTCL posted a loss of Rs7.2 billion from July to December FY25. Its total losses have now piled up to Rs43.6 billion. Because of these losses, PTCL is now among the top ten loss-making state-owned enterprises in Pakistan.

The Finance Ministry fears that buying Telenor might worsen PTCL’s financial health if the plan is not managed well. It could also block PTCL’s own digital goals and limit new investments in core business areas. The company still has unpaid pension liabilities of Rs 42.84 billion.

Back in 2005-06, PTCL made a profit of Rs20.78 billion when Etisalat took control. Today, the government still owns 62% of PTCL shares, Etisalat owns 26%, and the rest are held by the public. Whether this merger will help PTCL bounce back or add to its problems is something only time will tell.