PTCL-Telenor deal to undergo phase 2 analysis as CCP cites competition concerns

May 06, 2024 (MLN): An investigation by the Competition Commission of Pakistan (CCP) has provisionally concluded that Pakistan Telecommunication Company Limited’s (PTCL) proposed acquisition of Telenor Pakistan (Private) Limited (TP) and Orion Towers Private Limited (OT) could lead to a substantial lessening of competition in the telecommunication industry.

PTCL specializes in providing various telecommunication services such as cellular mobile telephony service, Wireless Local Loop service, Direct-to-Home television service and financial services through its subsidiaries across Pakistan, Azad Jammu & Kashmir (AJK) and Gilgit Baltistan (GB).

Telenor Pakistan (Private) Limited and Orion Towers Private Limited are wholly-owned subsidiaries of Telenor Pakistan BV (TPBV) and are engaged in providing cellular mobile and allied services in Pakistan, AJK and GB.

PTCL, which was founded in 1995, has already been declared as a Significant Market Power (SMP) Operator in Wholesale Domestic Leased Lines, Wholesale IP Bandwidth and Retail LDI Fixed-Line Telecommunication market by the Pakistan Telecommunication Authority (PTA).

With existing overlaps, the CCP found that, should the deal go ahead, the merger is likely to reduce choice, options, and competition in markets where there are only very few competitors and could lead to worse outcomes for the customers.

Pakistan Mobile Telecommunications Limited acquisition of Warid Telecom (Private) Limited reduced the number of network operators in 2016.

Through the proposed merger, one out of remaining four players would also be eliminated from the industry.

The CCP is concerned that this lessening of competition may result in higher prices or a reduction in choice or quality for customers hence, the transaction will be referred for an in-depth Phase 2 analysis.

The CCP aims to provide better services and products to the consumers of Pakistan by increasing competition in the telecommunication industry.

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