PTCL’s buyout of Telenor to stifle competition

The CCP provisionally concluded on Monday that PTCL’s acquisition of Telenor Pakistan (Private) Ltd and Orion Towers Private Ltd could substantially lessen competition in the telecommunication industry.

There are four players in Pakistan’s telecom sector: Jazz, Telenor, Zong, and Ufone, a subsidiary of PTCL. After the intended acquisition, Ufone and Telenor will merge to become equally as large as Jazz, leaving only three players in the telecom market.

PTCL is a publicly listed company that provides various telecommunication services, such as cellular mobile telephony, wireless local loop service, direct-to-home television service, and financial services, through its subsidiaries in Pakistan, Azad Jammu and Kashmir (AJK), and Gilgit-Baltistan.

Telenor Pakistan and Orion Towers are wholly-owned subsidiaries of Telenor Pakistan BV and provide cellular mobile and allied services in Pakistan, AJK, and GB.

The Phase-I review of PTCL’s merger application has ruled that the acquisition of Telenor could strengthen PTCL’s dominant position in the sector.

The CCP highlighted in its ruling that PTCL, founded in 1995, has already been declared a significant market power (SMP) operator in wholesale domestic leased lines, wholesale IP bandwidth, and retail LDI fixed-line telecommunication market by the Pakistan Telecommunication Authority (PTA). Dawn