Concern raised over acquisition of Telenor (and Ufone) by PTCL, Pakistan

As one of the largest mergers in Pakistan’s telecom sector is underway, the Competition Commission of Pakistan (CCP) has said that the decision on acquisition of Telenor Pakistan by Pakistan Telecommunication Company Limited (PTCL) could be delayed as competitors have expressed concern over the plan.

In a statement, the CCP said that a pre-merger application about PTCL’s intention to acquire 100% shareholding of Telenor Pakistan and Orion Towers was received on February 29, 2024.

However, the application was submitted with an incorrect fee and the remaining fee was sent to the commission on March 6, 2024. Later, to complete due diligence, further information was sought but PTCL’s legal teams had yet to submit the required information.

CCP pointed out that “after all the relevant documents and information is received, the commission has 30 working days to complete its due diligence, for the first phase review”.

Meanwhile, the CCP received concerns from a competitor about the intended acquisition of Telenor by PTCL, claiming that the move would reduce the number of competitors offering telephony services and it would further delay the due diligence process.

At present, four players are working in the telecom industry, led by Jazz and include Telenor, Zong and Ufone. Ufone is a subsidiary of PTCL and after the acquisition of Telenor, both Ufone and Telenor will be merged to become as large as Jazz.

Currently, the CCP’s merger department is processing 21 applications, which also include the acquisition of Telenor.

Other major merger in the telecom sector occurred in 2016 when Jazz acquired Warid. At that time, the CCP conducted a phase-II review, which included shareholdings in parent companies of Jazz.

Incidentally, during the phase-II review, CCP teams discovered that Telenor International had shareholding in Veon Limited, the parent company of Jazz.

Veon, a Dutch-domiciled multinational telecommunication services company, was directed by the CCP that shareholders of Telenor International would not attend Jazz-related agenda items in Veon board meetings, to ensure that there was no collusive decision-making between Telenor and Jazz’s parent company that could impact competition in Pakistan’s telecom sector.