CCP Engages Stakeholders and Regulators in PTCL-Telenor Merger

The Competition Commission of Pakistan (CCP) is currently undertaking a comprehensive Phase II Merger analysis regarding the proposed merger between Pakistan Telecommunication Company Limited (PTCL) and Telenor Pakistan (Private) Limited (Telenor). This announcement marks a significant step in the regulatory process, as the CCP seeks to thoroughly assess the potential impacts of this merger on Pakistan’s telecom market.

As part of this analysis, the CCP is actively engaging with key stakeholders, inviting them to present their concerns and perspectives on how the merger might influence the competitive landscape. The Commission is particularly focused on evaluating the potential benefits that the merger could bring, such as cost efficiencies, economies of scale, and enhanced financial stability. These factors are crucial in determining whether the merger could lead to an expansion of network coverage, an increase in capacity, and improvements in service quality for consumers.

CCP Engages Stakeholders and Regulators in PTCL and Telenor Merger

However, there are significant concerns surrounding the merger. One of the primary issues raised is the potential reduction in the number of cellular mobile operators in Pakistan from four to three, which could fundamentally alter the competitive dynamics of the market. Stakeholders have also voiced concerns about the possibility of PTCL and Telenor gaining a disproportionate share of capacity and spectrum, which could negatively impact the business operations of other competitors in the telecom sector.

The CCP is carefully examining these concerns, particularly about the market share dynamics within Pakistan’s mobile network capacity. There is a risk that the merger could create what is termed as “capacity asymmetry,” where one entity holds an overwhelming share of the market, potentially stifling competition and innovation in the telecom industry.

To safeguard against these potential risks, the CCP is analyzing several specific market segments, including the Retail LDI Fixed-line Telecommunication Market, Retail Mobile Telecommunication Market, Wholesale Domestic Leased Lines, Wholesale IP Bandwidth, and the Individual Mobile/Fixed Interconnect Market. This detailed analysis will ensure that the merger does not harm competition or disadvantage consumers.

PTCL initially filed the pre-merger application on March 6, 2024, after which the CCP had 30 days to conduct a preliminary review and issue a Phase I order. Following the announcement of the Phase I order on May 3, 2024, the CCP determined that there may be potential competition concerns, necessitating a more detailed Phase II review. The CCP now has 90 working days to complete this in-depth analysis and issue a final order on the merger.

See Also: Telenor Pakistan Bolsters Network to Improve Lives and Livelihoods in Gilgit Baltistan