Pakistan Telecommunication Authority (PTA) has granted conditional approval for the merger of Pakistan Telecommunication Company Limited (PTCL) and Telenor Pakistan, signaling a significant development in the country’s telecom sector. The approval comes with strict measures designed to prevent monopolistic practices and ensure a level playing field for all telecom operators. PTA has emphasized that the newly merged entity, referred to as MergeCo, must comply with rules preventing cross-subsidisation and maintain separate accounts for its business units. This follows concerns previously raised by Competition Commission of Pakistan (CCP) over PTCL allegedly subsidising Ufone, which affected PTCL’s revenue.
The PTA order, signed by Chairman Major General (Retd) Hafeezur Rehman, Member Finance Muhammad Naveed, and Member Compliance & Enforcement Dr Khawar Siddique Khokhar, lays out detailed requirements for the merged company. MergeCo, combining Ufone and Telenor Pakistan along with Telenor LDI Company and Orion Towers, must maintain transparent financial records and cannot engage in agreements or exclusive deals that would prevent other licensees from accessing PTCL’s bandwidth. This is aimed at protecting competition in the telecom market while enabling PTCL to retain its role as a major service provider.
Liabilities and obligations of Telenor Pakistan, Telenor LDI, and Orion Towers will be assumed by PTCL, but both the notifying parties and MergeCo are restricted from modifying brand names without PTA approval. MergeCo and PTCL must ensure non-discriminatory interconnection and pricing practices, avoiding preferential treatment for affiliates or subsidiaries. Cross-subsidisation between PTCL and MergeCo is strictly prohibited, and retail or downstream services cannot benefit from revenues of upstream services or be offered at unreasonably low prices to stifle competition. Additionally, both entities must participate in upcoming spectrum awards to improve coverage and capacity, aligning with international standards and practices.
The PTA order also restricts network merging, spectrum sharing, and site decommissioning without prior approval. Pakistan’s mobile market currently features four operators, with Jazz leading in revenue at 43.6% and subscriber base at 38.1%, while Ufone remains the smallest at 14.6% revenue and 14% subscribers. MergeCo is expected to capture 31.7% of revenue and 35.3% of subscribers, with a combined mobile broadband subscriber share of 32.4% for Telenor and Ufone. The merger is closely monitored to balance market competitiveness, ensuring that the dominant position does not impede other operators or compromise consumer choice.
This decision by PTA reflects careful regulatory oversight, aiming to accommodate consolidation in the telecom sector while upholding principles of transparency, fair pricing, and equitable access for all market participants. The conditions attached to the merger are designed to sustain competition, improve service delivery, and maintain operational clarity across PTCL, Telenor, and Ufone, securing a framework for growth without compromising market fairness.
Follow the SPIN IDG WhatsApp Channel for updates across the Smart Pakistan Insights Network covering all of Pakistan’s technology ecosystem.
