In a historic ruling, the Competition Commission of Pakistan (CCP) has given conditional approval for the Telenor-PTCL merger in Pakistan. This act is about to redefine Pakistan’s telecom sector, building a strong new giant capable of challenging market leaders such as Jazz and Zong.
Strategic Merger to Form ‘MergeCo’
The acquisition will be executed in two phases. To begin with, PTCL will buy Telenor Pakistan and Orion Towers. In the second phase, PTCL’s mobile business Ufone and those of Telenor will merge into a new entity named MergeCo. The newly created company will have a 32.8% market share in Pakistan’s cellular segment, making it the second-largest operator next to Jazz.
CCP’s Conditions to Protect Competition
In order to facilitate equal competition and avoid monopoly behavior, CCP has laid down a number of conditions:
- PTCL and MergeCo must be run with different boards and managements.
- No executive can work for both organizations, with a required three-year cooling-off period.
- Compliance will be overseen by an independent reviewer for five years.
- MergeCo has to ensure fair access for MVNOs and keep existing contracts intact for at least three years.
- Wholesale pricing and changes in infrastructure need PTA approval.
- These measures are intended to safeguard consumer interests and ensure a competitive telecom environment.
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Market Effect of Telenor-PTCL merger
The merger provides MergeCo with control over:
- 44.6% of Pakistan’s telecommunication towers
- 43.2% of the long-distance international (LDI) market
- 33.9% of the long-haul fiber network
This concentration of infrastructure may result in better delivery of services and network expansion, but CCP still has the right to withdraw approval or seek divestitures if anti-competitive conduct is identified.
What This Means for Consumers and Competitors
Consumers may end up with improved coverage, quicker internet speeds, and lower prices—assuming that regulatory terms are upheld. For rivals such as Jazz and Zong, the entry of MergeCo means a powerful new competitor with extensive infrastructure and market penetration.
A New Era for Telecom in Pakistan
The Telenor-PTCL merger is a watershed event in Pakistan’s telecom history. With CCP’s approval subject to certain conditions, the sector is in for a turnaround. When MergeCo starts operations, everyone will be watching how well it manages growth with regulation and consumer satisfaction.