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Islamabad: The Pakistan Telecommunication Company Ltd’s Ufone acquisition of Telenor Pakistan, announced nearly a year ago, is facing a regulatory setback, causing a delay in the merger of two of the country’s leading mobile operators.
Sources within the Pakistan Telecommunication Authority (PTA) revealed that the merger, initially agreed upon in December 2023, has been held up by the Competition Commission of Pakistan (CCP). Despite the Competition Commission of Pakistan (CCP) already clearing the transaction after lengthy hearings,it has been conducting its own review for the past six months.
Insider sources confirmed that the CCP was anticipated to announce a decision by the end of December 2024 but has yet to do so. This delay has purportedly affected the developmental strategies of both companies and has elicited apprehensions regarding foreign investment in Pakistan’s telecommunications and information technology sectors.
“Both companies have fulfilled all legal requirements. It’s unclear why the CCP is delaying the decision,” a source within the PTA stated.
The CCP appears to delay action due to the opposition of major telecom operators which would suffer losses from the proposed merger, as suggested by a senior Ministry of IT and Telecom official. PTCL continues to face a longstanding legal dispute with Etisalat regarding an $800 million debt from 2007.
The merger of two companies will form Pakistan’s biggest mobile operator through a combined customer base exceeding 75 million subscribers. Additionally, the installation of over 2,600 new Ufone mobile towers will create better coverage which may enhance market competition and force the other operators to provide improved services.
A senior PTA official confirmed that the authority is ready to approve the merger’s sanction after CCP certification. “If the CCP makes a decision today, PTA can issue its approval within a month,” the official said.
The delay in the merger has raised concerns about the government’s timeline for launching 5G services. The government has initially planned that the auction of 5G spectrum will take place in March 2023, however ongoing unsolved concerns have necessitated several postponements to the timeline. Experts warn that meeting the April 2025 launch deadline may be impossible without quick fixes.
The merger’s approval is also crucial for the timely release of the 5G spectrum. Once the CCP reaches a decision on the merger, the matter must pass through regulatory approvals, including the PTA, CCP, and State Bank of Pakistan (SBP). This government permission process could take one to two months, further compressing the timeline for the 5G auction.
The telecom industry is closely monitoring the situation, as the merger’s outcome will significantly impact market dynamics and the future of telecommunications in Pakistan.
