CCP flags concerns over PTCL-Telenor merger

Says merger could diminish consumer choice, prompts deeper probe

ISLAMABAD:

The Competition Commission of Pakistan (CCP) stated on Monday that telecommunications mergers could diminish consumer options, citing the acquisition of Telenor Pakistan (Private) Limited (TP) by Pakistan Telecommunication Company Limited (PTCL).

The regulator revealed that a preliminary investigation by the CCP has indicated that the proposed acquisition of Telenor Pakistan and Orion Towers Private Limited (OT) by PTCL could result in a significant decrease in competition within the telecommunications sector.

PTCL, a publicly listed company, specialises in various telecommunication services, including cellular mobile telephony, Wireless Local Loop service, Direct-to-Home television service, and financial services across Pakistan.

Telenor Pakistan and OT, both wholly-owned subsidiaries of M/s Telenor Pakistan BV, provide cellular mobile and allied services across Pakistan.

PTCL, founded in 1995, has already been identified as a Significant Market Power Operator in Wholesale Domestic Leased Lines, Wholesale IP Bandwidth, and Retail LDI Fixed-Line Telecommunication market by the Pakistan Telecommunication Authority (PTA). Given existing overlaps, the CCP concluded that if the acquisition proceeds, competition could diminish, leading to fewer choices and options, particularly in markets with few competitors, potentially resulting in adverse outcomes for customers.

The acquisition of M/s Warid Telecom (Private) Limited by M/s Pakistan Mobile Telecommunications Limited in 2016 already reduced the number of network operators. With the proposed merger, one of the remaining four players would be eliminated from the industry. The CCP is concerned that this reduction in competition may lead to higher prices or diminished choice or quality for customers, prompting the decision to refer the transaction for an in-depth Phase 2 analysis.

Published in The Express Tribune, May 7^th, 2024.

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