CCP sets out tough conditions for PTCL–Telenor merger

October 01, 2025 (MLN): The Competition Commission of Pakistan (CCP) unveiled its much-anticipated decision at a press conference just a while ago, granting conditional approval to Pakistan Telecommunication Company Limited’s (PTCL) acquisition of Telenor Pakistan and Orion Towers.

The Commission has laid down an extensive framework of over 20 major conditions, aimed at preventing anti-competitive practices, safeguarding consumer rights, and ensuring that the merged entity does not misuse its dominant position.

First Phase: Vertical merger between PTCL and Telenor Pakistan
Second Phase: Horizontal merger between Ufone and Telenor's mobile operations

The approval sets in motion a complex restructuring of Pakistan's telecom landscape. The first phase involves a vertical merger between PTCL and Telenor Pakistan, followed by a horizontal merger that will see Ufone and Telenor's mobile operations combined into a single entity (MergeCo).

This two-pronged approach will create a formidable player in Pakistan's telecommunications market, with the merged cellular operations holding a 32.8% market share, positioning it as the second-largest mobile operator behind Jazz's 43.1%.

Key regulatory requirements (Conditions) include:

Management Independence

In a move designed to prevent coordinated anti-competitive behavior, PTCL and MergeCo must maintain completely separate boards of directors and management teams.

No individual may simultaneously hold positions in both entities, and any person leaving one organization must wait three years before joining the other's board or management.

The Commission has mandated that CEOs and senior management possess demonstrable competence in telecommunications, proven turnaround expertise, and impeccable integrity.

Management will be evaluated against specific Key Performance Indicators including cost efficiencies, network improvements, profitability, and delivery of promised efficiencies.

Third-Party Oversight

A cornerstone of the regulatory framework is the appointment of an independent Third-Party Reviewer (TPR) for five years.

The TPR will conduct comprehensive audits, review board meeting minutes, and submit quarterly compliance reports to the Commission.

PTCL and MergeCo must propose at least three qualified candidates to the CCP within four weeks of the order's issuance.

Financial Transparency and Related Party Transactions

Both entities are explicitly prohibited from sharing commercially sensitive information. Any procurement of telecom-related services between PTCL and MergeCo must be conducted on a competitive, arm's length basis.

Separate accounts must be maintained for all telecom service segments, verified by independent auditors, and submitted quarterly to the TPR.

Non-Discriminatory Access and Fair Pricing

The Commission has imposed strict conditions to ensure fair market access. PTCL and MergeCo must provide non-discriminatory access to their infrastructure and interconnection capacity to all telecom operators.

PTCL must submit all Reference Interconnect Offers to the Pakistan Telecommunication Authority (PTA) for approval and cannot reduce interconnection circuits allocated to other operators without PTA approval.

To prevent predatory pricing, PTCL must seek PTA approval for wholesale pricing of IP bandwidth, LDI services, domestic leased lines, and telecom infrastructure services.

The Commission specifically noted that PTCL has been charging higher rates to Ufone for certain services—a practice that must end.

Cross-subsidization between PTCL and MergeCo that could distort competition is strictly prohibited.

MVNO Access and Consumer Protection

MergeCo must provide wholesale access to new Mobile Virtual Network Operators (MVNOs), including network access, call origination and termination, international roaming, and portability database access on commercially fair terms.

The merged entity must maintain service quality standards and obtain PTA approval for any retail tariff changes.

Infrastructure and Contract Continuity

MergeCo must continue all existing contracts between Telenor Pakistan, Telenor LDI, and other telecom operators for the unexpired contract period or three years, whichever is earlier.

Any decommissioning or relocation of existing BTS sites and network infrastructure requires PTA approval. Infrastructure sharing agreements must be disclosed to PTA and the TPR within 45 days.

Market Concentration Concerns

The merger creates significant market concentration across multiple telecom submarkets, raising concerns that prompted the CCP's stringent regulatory framework.

Cellular Mobile Operators Market Share

Operator
Market Share
Post-Merger Status
Jazz
43.1%
Remains market leader
MergeCo (Ufone + Telenor)
32.8%
Second largest
Zong
24.1%
Third position
Ufone (standalone)
13.4%
To be merged
Telenor (standalone)
19.4%
To be merged

Retail Long Distance & International (LDI) Fixed Line Market

Market Player
Market Share
Status
MergeCo (PTCL + Telenor LDI)
43.18%
Market leader
LinkDotNet
30.06%
Competitor
CMPak LDI
11.31%
Competitor
PTCL (standalone)
32.67%
To be merged
Telenor LDI (standalone)
10.51%
To be merged
Wateen
8.28%
Competitor
Others
5.34%
Various competitors

Wholesale Domestic Leased Lines Market

Market Player
Market Share
MergeCo
42.7%
Wateen
28.3%
LinkDotNet
26.9%
CMPak LDI
2.0%

Wholesale IP Bandwidth Market

Market Player
Market Share
PTCL
64.5%
TWA
35.5%

Telecom Infrastructure: Tower Ownership

Operator
Network Sites
Percentage of Total
Market Position
MergeCo (Ufone + Telenor)
24,000
44.6%
Largest
Jazz
15,506
27.9%
Second
Zong
15,239
27.4%
Third
Telenor (standalone)
13,074
23.5%
To be merged
Ufone (standalone)
11,730
21.1%
To be merged
Total Towers in Pakistan
55,549
100%

Long Haul Optical Fiber Cable (OFC) Deployment

LDI Operator
Fiber Length (KMs)
Market Share
PTCL
24,401
33.94%
Wateen
21,338
29.68%
LinkDotNet
10,457
14.5%
Multinet Pakistan
7,119
9.9%
NTC
4,343
6.04%
CMPak LDI
2,500
3.48%
Cybernet
1,734
2.41%

The tables above illustrate the substantial market power the merged entities will wield across multiple telecom submarkets.

Most notably, in telecom infrastructure, MergeCo will control 24,000 towers, 44.6% of Pakistan's total tower infrastructure, creating the largest tower portfolio in the country.

The Commission acknowledged these concentration concerns but determined that the merger's claimed efficiencies, including increased network capacity, spectrum consolidation, 5G acceleration, fiber penetration growth, and cost savings, could outweigh competitive concerns if properly regulated.

Efficiencies Must Be Substantiated

PTCL and MergeCo are required to substantiate all efficiency claims made during merger proceedings with comprehensive, verifiable data.

They must demonstrate how efficiencies have been passed to consumers through competitive pricing, better services, and increased infrastructure investment.

The proposed investment for improving network quality is mandatory, with PTCL required to implement its Business Plan over five years and report to CCP after board meetings.

Divestiture Powers Retained

In a significant retention of regulatory power, the Commission reserved the right to direct PTCL to divest its telecom infrastructure or any business segment if deemed necessary upon review.

This divestiture option serves as an ultimate safeguard against potential anti-competitive outcomes.

Compliance and Penalties

Both entities must establish independent Compliance Departments reporting directly to dedicated compliance heads, ensuring autonomy from other group functions.

In cases of non-compliance, the Commission may impose financial penalties, revoke merger approval, or take other appropriate measures under the Competition Act, 2010.

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