ISLAMABAD: The Competition Commission of Pakistan (CCP) has approved the conditional acquisition of Telenor Pakistan by the Pakistan Telecommunication Company Limited (PTCL).
The CCP has placed dozens of conditions, including the placement of a Third Party Review (TPR) for five years to monitor compliance with conditions, audit board decisions, and submission of quarterly reports to the CCP. The TPR condition has been placed for the first time in such a big acquisition, having a value of $1 billion. However, it is yet to be seen how this TPR will prove effective for fulfilling the conditions attached to this acquisition.
“We have scrutinised the acquisition of Telenor Pakistan by the PTCL for almost 18 months, one of the most complicated transactions ever done by any regulator around the globe,” CCP Chairman Dr Kabir Ahmed Sidhu announced in a news conference here on Wednesday. Flanked by CCP Member Salman Amin, Registrar Shahzad Hussain, and Head of Legal Ms Ambreen Abbasi, Dr Sidhu informed that the CCP conditionally approved PTCL’s acquisition of 100 per cent shareholding of Telenor Pakistan (Pvt) Ltd. and Orion Towers (Pvt) Ltd.
The approval requires PTCL and the merged entity to maintain separate boards and management, prohibits cross-subsidisation, mandates non-discriminatory access to telecom infrastructure, and places restrictions on predatory pricing.
The order also contains a divestment clause, under which CCP may review the approval and direct PTCL to divest assets or business segments in case of non-compliance. According to the order, the merger transaction is expected to be completed within one year.
Dr Sidhu said the CCP also studied similar cases in jurisdictions including the United States, the United Kingdom, and the European Union before issuing its order. He said the conditions were aimed at preventing market distortion and ensuring that efficiencies were passed on to consumers.
As per the order, the CEOs and senior management of PTCL and MergeCo must have telecom industry experience, competence, and integrity. Etisalat, as a strategic shareholder, is responsible for ensuring professional leadership.
Independent Third Party Reviewer will be appointed for five years to monitor compliance with conditions, audit board decisions, and submit quarterly reports to CCP.
Both entities are prohibited from sharing sensitive commercial information. Related-party transactions must be conducted at arm’s length and competitively, while cross-subsidisation between PTCL and MergeCo is strictly prohibited.
Non-discriminatory access to interconnection and infrastructure must be provided to all operators. PTCL must submit all Reference Interconnect Offers (RIOs) to PTA for approval and apply them uniformly. Besides, infrastructure sharing agreements must be disclosed to PTA and the TPR.
PTCL and MergeCo must maintain separate accounts verified by independent auditors, and each company is required to establish an independent compliance department to oversee adherence to the order.
PTCL will have to seek PTA approval for wholesale pricing in IP bandwidth, LDI, leased lines, and infrastructure services, while predatory retail pricing is prohibited. Both entities must uphold service quality standards, pursue innovation, including 5G roll-out, and obtain PTA approval for tariff changes.
MergeCo will have to provide wholesale access to new Mobile Virtual Network Operators (MVNOs) on fair and reasonable terms, and spectrum sharing must comply with any framework issued by the federal government.
The order said PTCL and MergeCo must demonstrate that claimed efficiencies, such as network expansion, 5G acceleration, and fiberisation, were passed on to consumers through competitive pricing and improved services.
The order explicitly empowers the CCP to review its approval and direct PTCL to divest infrastructure or business segments if conditions were violated or anti-competitive conduct was detected.
Until the amalgamation is fully completed within a year, all conditions remain binding on both PTCL and Telenor Pakistan.
Member CCP Salman Amin said the conditions aim to prevent favouritism, predatory pricing, and barriers to market entry, with ongoing regulatory oversight by CCP in coordination with PTA.
