ISLAMABAD: The Competition Commission of Pakistan (CCP) has disclosed that delays and regulatory lapses by Pakistan Telecommunication Company Limited (PTCL) have stalled the proposed $1 billion Ufone-Telenor merger. In a detailed briefing to the Senate Standing Committee on IT, the regulator stated that PTCL has yet again failed to submit its $1 billion investment plan, a key requirement for moving the merger forward. The CCP noted that despite repeated reminders, PTCL had not provided timely plans outlining the efficiencies and benefits expected to arise from the deal.
The CCP highlighted a broader pattern of non-compliance by PTCL, which has challenged several Pakistan Telecommunication Authority (PTA) regulations in court and secured stay orders, including those related to Significant Market Power (SMP) determination. This situation has left PTA unable to enforce Reference Interconnect Offer (RIO) approvals on PTCL, thereby removing regulatory oversight on tariffs charged to other telecom operators. According to the regulator, this undermines market transparency and distorts competition.
Concerns were also raised over PTCL’s “non-compliance with the Separate Accounting Requirement” applicable to both Ufone and PTCL. The Commission warned that this lack of separation increases the risk of cross-subsidisation between the two entities. PTCL holds a Long-Distance International (LDI) licence while Ufone operates as a Cellular Mobile Operator (CMO), yet both are under joint management, a structure the CCP believes requires close scrutiny to prevent anti-competitive practices. Officials noted PTCL’s delays in providing requested information have further complicated the review process.
Under Section 11(11) of the Competition Act, the CCP is empowered to block or approve transactions with strict conditions, including legally enforceable undertakings. The Commission stressed that PTCL’s position as a dominant player in both upstream and downstream segments of the telecom market must not result in preferential treatment. It recalled PTCL’s history of collusion in the International Clearing House (ICH) case, where PTCL and 13 other undertakings were fined for anti-competitive conduct. That order was upheld by the Competition Appellate Tribunal on August 11, 2025, with PTCL already paying Rs70 million in penalties.
The CCP further underscored that PTCL has been unable to run Ufone profitably, with the mobile operator consistently reporting losses. It warned that while mergers in the telecom sector can enhance efficiencies, improve connectivity and foster innovation, the PTCL transaction raises significant competition risks. Consolidation could strengthen PTCL’s dominance, create a highly concentrated mobile operator, and risk a Substantial Lessening of Competition (SLC). Such an outcome could increase entry barriers, limit consumer choice, reduce innovation, and prevent any promised efficiencies from materialising, the Commission told lawmakers.
Follow the SPIN IDG WhatsApp Channel for updates across the Smart Pakistan Insights Network covering all of Pakistan’s technology ecosystem.
