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Pakistan Telecommunication Company Limited is poised to acquire Telenor Pakistan Pvt Ltd and Orion Towers Pvt Ltd. The Competition Commission of Pakistan (CCP) is currently reviewing potential remedies to address concerns regarding reduced competition and potential abuse of dominance, among other issues, and will announce its decision shortly.
While appearing on Aaj TV’s “Paisa bolta hay with Anjum Ibrahim,” Salman Amin, Member (Office of Fair Trade, Cartels & Office of International Affairs), Competition Commission of Pakistan (CCP), stated this.
A few pieces of information requested from PTCL are still pending, as Amin acknowledged.
The Phase-II review of PTCL’s acquisition of 100 percent shareholding in Telenor Pakistan Pvt Ltd and Orion Towers Pvt Ltd has been gracefully finished by the CCP, and the verdict is anticipated to be revealed soon.
According to the CCP’s member, “the Commission is looking into the matter whenever there is a merger and acquisition case to ensure that competition was not affected.” This is in line with the CCP’s mandate to promote fair competition in all areas of the economy.
CCP’s Approach to Mergers and Acquisitions
When asked about the PTCL-Telenor merger, Amin replied that it is “one of the big and unique cases, particularly in this sector” and that drawing parallels to the merger of Jazz and Warid might not be accurate because the two deals are so different.
According to Member CCP, “As per our law, we clear merger cases in Phase-1 with all transactions if there is no risk of misuse of dominance.” However, these cases are moved to Phase II when the Commission finds certain elements and risks of abusing the dominant position or lessening competition.
In-Depth Phase-II Review Process
The second phase of the assessment is far more in-depth and requires a multi-stakeholder approach, encompassing regulators, rivals, and both upstream and downstream market participants, as well as a thorough hearing.
Amin stated that all necessary precautions were taken in this matter by consulting with relevant parties and holding public hearings because the transaction is massive, with an estimated value of $500 million, and might have far-reaching economic consequences of billions of dollars.
The speaker went on to say that there were problems because the company was a “significant market player” (SMP) under the Pakistan Telecom Act, which meant that the Commission had to consider sector legislation as well. As a result, they are currently in the last stages of the process and are hoping for a judgment rather soon.
“We also look at risk of lessening of competition in merger cases. After this the CCP also look at in such cases whether dominant position is something bad or abuse is bad. We have to differentiate in these things and we also see their licenses whether these are not abusive”, said Amin, adding that after this when they come to the CCP for merger acquisition.
The decision will be made with the concerns and potential remedies in mind, and we will assess the impact, according to Amin.
Amin responded to a query by saying that CCP and other stakeholders and rivals had asked questions and wanted information throughout the process and hearing. You will receive the remaining information after the PTCL has mostly supplied it.
“Dominant position is not an issue; abuse is,” he said, explaining the CCP’s cautious approach. He went on to say that news in the industry cannot be ignored while making decisions.
Concerning the privatization of PIA According to Amin, the failure occurred because the vendor, the government, did not carry out adequate due diligence. Before the seller’s due diligence is completed, the market disregards the transaction structure, which includes corporate affairs, legal affairs, human resources, lending position, and contingencies.
Rapid action was taken in multiple instances involving PIA. To ensure the success of the PIA privatization this time, he suggested implementing a marketing strategy and conducting thorough due diligence.
