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ISLAMABAD: The Pakistan Telecommunication Company Limited (PTCL) Group allegedly approached the Special Investment Facilitation Council (SIFC) to express their dissatisfaction with the excessive delay in the decision-making process of the Competition Commission of Pakistan (CCP) about the acquisition of Telenor Pakistan (Pvt) Ltd and Orion Towers (Pvt) Ltd.
CCP Shares Acquisition Terms
According to reliable sources cited by Business Recorder, CCP discussed some terms with PTCL last Tuesday, which are believed to be related to the acquisition decision. To prevent PTCL from exploiting its dominating position in the Long Distance International (LDI) industry, the criteria included Section 3 of the Competition Act, which deals with the misuse of the dominant position.
Practices Prohibited Under Section 3
The CCP’s terms outlined the following practices as violations of Section 3:
- Reducing production or sales.
- Raising prices without justification.
- Making sales of goods or services conditional on other purchases.
- Engaging in predatory pricing.
- Refusing to deal with competitors.
- Boycotting or excluding other enterprises.
In addition to these broad restrictions, the CCP has provided sector-specific conditions to regulate PTCL’s influence in various telecom submarkets.
In its exhaustive evaluation, the CCP looked closely at how the deal will affect several submarkets within the telecom industry. These included local loop operators (LLOs), mobile network operators, telecom infrastructure, domestic leased lines, and IP bandwidth.
It became known during CCP’s round of public hearings that the merger would drastically alter market shares in a number of telecommunications industries. The claim will give PTCL control of 61% of the LDI market, even though it already has 50.5% of the retail LDI fixed-line market.
A new company controlling 37% of the mobile telecoms market will be formed when PTCL’s 12.4% stake in Ufone and Telenor’s 24% stake are combined. The deal will also give PTCL a stranglehold on the wholesale IP bandwidth market, with 68 percent and 42.7% of the market share, respectively.
Awaiting P TCL’s Response
The PTCL Group has allegedly not yet responded to CCP’s request for clarification on this matter. According to an official from CCP who spoke with Business Recorder, the Commission is waiting for PTCL to respond before making a decision on the purchase matter. Reportedly, the Group recently brought up the issue during a conveyance to SIFC.
In light of potential remedies to address concerns about diminished competition and abuse of dominance, Salman Amin, a member of the CCP’s Office of Fair Trade, Cartels and Office of International Affairs, recently stated that the Commission is preparing to announce its decision regarding PTCL’s acquisition of Telenor Pakistan (Pvt) Ltd and Orion Towers (Pvt) Ltd soon.
The CCP is likely to announce its decision about PTCL’s acquisition of 100% shares in Telenor Pakistan (Pvt) Ltd and Orion Towers (Pvt) Ltd soon after completing all amicable formalities of Phase-II review.
