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The Competition Commission of Pakistan (CCP) has directed Pakistan Telecommunication Company Ltd (PTCL) to unbundle its operations following the approval of its merger with Telenor Pakistan. The move aims to prevent anti-competitive behavior and promote transparency in Pakistan’s telecom sector after the merger.
According to a detailed order published on the CCP’s website, the regulator has imposed strict conditions to separate the newly formed entity, comprising Ufone and Telenor Pakistan (MergeCo), from PTCL’s other business operations. PTCL has provided written assurance that it will fully comply with the decision.
Once completed, the merged company is expected to become the second-largest cellular mobile operator (CMO) in Pakistan after Jazz, overtaking Zong. Currently, Ufone remains the only loss-making CMO among the four major operators. Under CCP conditions, the MergeCo must demonstrate financial sustainability, with an independent third-party evaluator submitting biannual performance reports to the CCP.
To ensure operational independence, the CCP has instructed PTCL and MergeCo to maintain separate financial accounts for all service segments. They must also have distinct management structures and independent boards of directors. The order specifically states that no individual may serve simultaneously on both PTCL and MergeCo boards or hold senior management positions in both entities. Furthermore, any former executives or directors are barred from joining the other organization for at least three years after leaving their position.
Senate Committee Welcomes CCP’s Decision
Palwasha Khan, Chairperson of the Senate Standing Committee on IT and Telecom, praised the CCP’s ruling, emphasizing the need to protect public interest as PTCL remains a state-owned company. “The committee will seek quarterly accounts of MergeCo to ensure it stays profitable,” she said.
The order also prohibits the exchange of commercially sensitive information between PTCL and MergeCo. Any changes to interconnection circuits allocated to other telecom operators, including local loop, long-distance international, and cellular licensees, will require prior approval from the Pakistan Telecommunication Authority (PTA). Additionally, interconnect pricing or capacity must not be manipulated to restrict other operators’ access to MergeCo customers.
A senior CCP official warned that failure to comply could trigger strict enforcement actions, including the possible divestment of PTCL’s telecom infrastructure or parts of its business under Clause 13.19 of the order.
Analysts believe that the unbundling of PTCL’s operations will enhance transparency, prevent cross-subsidization, and foster fair competition within Pakistan’s telecom industry.
