Ufone-Telenor merger and the prospects of 5G auction

WEB DESK: Last week, the Competition Commission of Pakistan (CCP) approved Pakistan Telecommunications Limited’s (PTCL) acquisition of mobile carrier Telenor Pakistan and Orion Towers shareholdings. As a result of the acquisition deal, PTCL’s subsidiary Ufone will now merge with Telenor mobile carrier service.

In addition to cutting down one major player from the telecom sector, this merger also has some broader impacts for the telecom customers in the country. Firstly, with Ufone absorbing Telenor’s entire infrastructure, spectrum assets, and customer base, this consolidation has created a new telecom heavyweight which now commands approximately one-third of the entire market, 32.8 per cent to be exact. Jazz still leads with an estimated 43 per cent share, but this merger has now significantly closed what used to be a substantial gap between Jazz and other players in the market.

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Zong, backed by China Mobile, holds around 24.1 per cent and now finds itself in a redefined competitive landscape, where each player has the scale and resources to go head-to-head.

Industry analysts have welcomed the merger as a much-needed move toward market rationalisation. Pakistan’s low Average Revenue Per User (ARPU) environment has long made it difficult for four separate players to sustain large-scale investments in infrastructure and innovation. The transition to a three-operator ecosystem is expected to allow more focused capital allocation, particularly in upgrading networks and preparing for 5G deployment.

THE ETISALAT FACTOR

One of the main strengths of this newly merged entity lies in its association with PTCL’s major shareholder state-owned Emirati telecommunications company, Etisalat. The fixed-line and broadband capabilities of PTCL could offer crucial synergies as well, particularly in strengthening the backhaul infrastructure and enhancing mobile data speeds for the new service provider.

Key priorities for the newly merged entity are expected to include streamlining network infrastructure to eliminate duplication, accelerating 4G densification and 5G readiness, unified branding and customer experience as well as leveraging PTCL’s fiber backbone for improved service delivery

THE ELEPHANT IN THE ROOM – 5G AUCTION

The Ufone-Telenor consolidation has not only reduced market fragmentation but also signaled a new chapter of high-stakes competition. For years, Pakistan’s telecom sector was marked by an uneven playing field, one dominant player, two struggling contenders, and an under-served customer base. That equation has now changed.

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Until now, Zong was the only operator with both the financial capacity and operational readiness to seriously contend in the long-anticipated 5G spectrum auction, a topic that has dominated discussions among industry stakeholders and regulators for years. However, the Ufone-Telenor merger changes the equation. With consolidated assets and backing from PTCL and Etisalat, the newly strengthened entity is now well-positioned to enter the 5G bidding process. This development also puts pressure on Jazz to step up and match the investment, if it hopes to maintain its market leadership in the next phase of technological evolution.

With three large operators, each backed by powerful parent companies, the sector appears more balanced, with the promise of better service quality, faster technology adoption, and more customer-centric offerings.