PTCL-Telenor Merger Delay Stalls Pakistan’s 5G Spectrum Auction

The proposed PTCL‑Telenor merger has stalled Pakistan’s 5G spectrum auction, now postponed by over four months due to incomplete regulatory filings. The Competition Commission of Pakistan (CCP) has requested additional documents from PTCL, as its initial filing lacked clarity. As a result, Telenor is currently excluded from the auction, and uncertainty persists until the merger is officially approved.

IT Minister Shaza Fatima Khawaja confirmed that the auction cannot proceed until the CCP concludes its review of the merger. The Minister emphasized that regulatory autonomy prevents the government and IT Ministry from influencing the process. Furthermore, the format of the auction—whether three or four participants—will be decided only after the CCP’s merger decision.

Pakistan’s telecom sector consists of four major operators: Jazz (37%), Zong (26%), Telenor (22%), and Ufone (13%).  The auction delay is aggravated by Ufone’s continuous financial losses—nearly Rs 14.4 billion in 2024—which further complicates the merger review, according to analysts .

Why Is Ufone Struggling?

Ufone, with around 13% market share and roughly 26 million users, continues to post substantial losses. In 2024, combined losses exceeded Rs 14.4 billion. High operating costs, abundant spectrum fees, and inefficiencies in operations have weighed heavily on its finances. PTCL has been subsidizing Ufone’s shortfalls, diverting resources from infrastructure improvements. The struggling subsidiary has eroded investor confidence and added pressure on the merger review process.

Regional 5G Rollouts: 

Pakistan currently lags behind regional peers in deploying commercial 5G:

• India completed a major auction in mid-2022 and has fast-growing 5G coverage in over 277 cities.
• Bangladesh and Bhutan have completed auctions, while Bangladesh is running trials and rolling out limited coverage.
• Sri Lanka and Afghanistan are still in trial phases, not yet fully commercial.
• Iran also launched services after auctioning its spectrum.

In contrast, Pakistan’s 5G readiness is hindered by delayed policy decisions, litigation over spectrum bands, and infrastructure gaps like low fiber backhaul. This puts the country at a competitive disadvantage.

Sector-wide Challenges 

Across Pakistan’s telecom market, users report persistent call drops and slow data speeds. These issues stem from outdated networks, poor fiber connectivity, and uneven tower distribution. Without a swift resolution to the merger and renewed investment in infrastructure, these problems are poised to worsen in the 5G era.

Will Telenor Customers Suffer?

Although Telenor’s infrastructure quality is not as strong as Jazz or Zong, it remains more stable than Ufone. As such, its customers are unlikely to experience Ufone-level service issues in the near term. Still, Telenor’s inability to participate in the 5G auction may affect its future competitiveness. Delayed rollout and reduced investment could impact data speeds and coverage down the line.

What Must Happen Next?

1. PTCL must clarify and resubmit the merger documents to the CCP.
2. Ufone needs structural reforms to regain financial health.
3. PTA must resolve spectrum litigation and develop a transparent 5G roadmap.

Operators must ramp up fiber investments to support future networks.