The Competition Commission of Pakistan (CCP) is currently undertaking a detailed Phase II Merger analysis in response to the proposed merger between Pakistan Telecommunication Company Limited (PTCL) and Telenor Pakistan (Private) Limited (Telenor). This analysis follows the Phase I order, which suggested that the merger could have a potential impact on competition in Pakistan’s telecom sector.
Stakeholder Involvement
As part of the Phase II analysis, CCP is providing key stakeholders with the opportunity to present their concerns regarding the potential impact of the merger on Pakistan’s telecom market. This process ensures that all relevant voices are heard before any final decisions are made.
Potential Benefits of the Merger
CCP is evaluating the possible advantages of the merger, including the potential for cost efficiencies and economies of scale. These benefits could enhance the financial stability of the merged entity, potentially leading to an expansion of network coverage, increased capacity, and improved service quality for consumers.
Concerns Over Competition
A primary concern raised by stakeholders is the reduction in the number of cellular mobile operators in Pakistan from four to three, which could significantly alter the competitive landscape. Additionally, there are worries about the potential for a ‘disproportionate’ share of capacity and spectrum, which could negatively impact competitors in the market.
Market Analysis by CCP
The Commission is carefully analyzing several markets to safeguard competition, including:
- Retail LDI Fixed-line Telecommunication Market
- Retail Mobile Telecommunication Market
- Wholesale Domestic Leased Lines
- Wholesale IP Bandwidth
- Individual Mobile/Fixed Interconnect Market
CCP’s analysis focuses on the market share dynamics of Pakistan’s mobile network capacity and the risk of creating a ‘capacity asymmetry’ that could harm competition.
Timeline of the Merger Review
PTCL filed the pre-merger application on March 6, 2024. CCP had 30 days to review this application and issue a Phase I order, which was announced on May 3, 2024, within the specified timeframe. The Phase I order identified potential competition concerns, leading to the initiation of the Phase II review.
CCP has 90 working days to complete this detailed Phase II review and issue its final order regarding the merger. This comprehensive analysis will determine whether the merger should proceed and under what conditions to ensure a fair and competitive telecom market in Pakistan.
