Telecos raise competition concerns over PTCL’s takeover of Telenor

ISLAMABAD: Wateen Telecom and Jazz Telecom have raised significant objections to PTCL’s bid to acquire Telenor Pakistan, expressing concerns during a Competition Commission of Pakistan (CCP) hearing on Wednesday. The telecom giants fear the merger could disrupt market competition, Dawn News reported on Thursday.

The hearing, part of the CCP’s Phase II Merger Review of PTCL’s plan to acquire 100 per cent of Telenor Pakistan and Orion Towers Private Limited, was overseen by CCP Chairman Dr Kabir Ahmed Sidhu. CCP members Salman Amin and Abdul Rashid Sheikh were also in attendance.

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The acquisition, first announced in December, involves a deal valued at Rs108 billion ($380 million) on a cash-free, debt-free basis, and is awaiting regulatory approvals.

PTCL’s bid comes as Telenor Group, headquartered in Norway, is restructuring its operations in Asia, having recently consolidated its businesses in Thailand and Malaysia through local mergers, the news report said.

During the hearing, Wateen Telecom’s counsel, Mian Sami-ud-din, voiced apprehensions about PTCL’s dominant position in the wholesale supply of backhaul services for cellular mobile operators (CMOs), including Long Distance and International (LDI) services.

He argued that the merger could allow PTCL to monopolise LDI services, citing the recent shift of Ufone’s LDI service from Wateen in Balochistan as an example. Currently, PTCL controls 48 per cent of the LDI market, and Sami warned that further consolidation would squeeze out competitors.

Khalid Ibrahim, representing Jazz Telecom, echoed these concerns, warning that the merger would give PTCL undue market dominance. He urged the CCP to impose stringent pre- and post-merger conditions to ensure fair competition. He suggested these should include mandatory provisions requiring the merged entity to allow other operators access to its network on fair, mutually agreed terms, along with non-discriminatory access to infrastructure and spectrum sharing.

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On the other hand, PTCL’s legal representative and former CCP chairperson Rahat Kaunain Hassan defended the acquisition. She argued that the deal would lead to greater efficiency, economies of scale, and contribute to the vision of a “Digital Pakistan” by enhancing the country’s IT infrastructure.

The CCP has requested further data from PTCL and Telenor as part of the ongoing review process to assess the merger’s impact on market competition.