ISLAMABAD: In a bid to secure regulatory approval for the acquisition of Telenor Pakistan, Pakistan Telecommunication Company Limited (PTCL) has submitted a detailed business development plan to the Competition Commission of Pakistan (CCP), including proposed multimillion-dollar investments over the medium term.
Earlier, PTCL had submitted a plan outlining close to $1 billion in investments over five years to acquire 100 per cent shareholding in Telenor Pakistan (Private) Limited and Orion Towers (Private) Limited.
The CCP had previously raised questions and sought written responses. Recently, senior officials from Etisalat — which holds management control of PTCL — met with top government leadership and urged the swift conclusion of proceedings to finalise the transaction.
To address the CCP’s concerns, PTCL presented a detailed response and representation, aiming to satisfy the regulator’s queries on the proposed merger.The acquisition holds strategic importance for the upcoming 5G spectrum auction. A consultant involved in the auction process raised the question of whether a future strategy could be based on the presence of three or four competitors in the telecom market.
The CCP bench — comprising Chairman Dr Kabir Ahmed Sidhu, Member Salman Amin, and Member Abdul Rashid Sheikh — sought further clarity to comprehensively assess the merger’s impact on competition within the sector. The bench questioned PTCL on the proposed investment sources and post-merger expansion plans for the combined entity of PTCL, Ufone, and Telenor Pakistan.
PTCL officials told the commission that the merger would generate operational efficiencies through economies of scale and by consolidating infrastructure — including tower networks and office facilities.
The issue of ‘Regulatory Accounts’ was also raised. The CCP noted that Ufone had consistently reported negative revenues over an extended period, in contrast to profitable competitors such as Zong, Jazz and Telenor. The commission sought an explanation for Ufone’s continued losses.
PTCL is a state-owned enterprise, with the government of Pakistan holding a 62 per cent stake, while 12 per cent is publicly traded. In 2006, management control was transferred to UAE-based telecom operator Etisalat, which acquired a 26 per cent stake.
At the time of the transfer in 2005-06, PTCL reported net profits of Rs20.78 billion. However, a recent report by the Ministry of Finance ranked PTCL seventh among the top loss-making SOEs in the first half of FY2023-24. The report also flagged PTCL’s outstanding pension liabilities of Rs42.84 billion.