The Competition Commission of Pakistan (CCP) is expected to grant approval for the merger of Telenor Pakistan with Pakistan Telecommunication Company Limited (PTCL), contingent upon the acceptance of a new settlement option. This development follows intervention from the Special Investment Facilitation Council (SIFC).
PTCL’s merger application has been pending for nearly a year, primarily due to the management’s failure to provide necessary documents to address numerous queries from the CCP. A letter from the CCP to PTCL’s lawyer, Rahat Kaunain Hassan, referenced Section 11(11) of the Competition Act 2010, offering a new settlement option to the company.
The settlement includes a proposed investment of approximately $1 billion from UAE-based telecom company e& (formerly Etisalat), which holds management control of PTCL. The CCP has requested timelines and details regarding the areas where PTCL plans to allocate this investment.
According to Clause 11 of Section 11, if the CCP determines that the merger does not meet specified criteria, it may prohibit the transaction. However, the law also allows the CCP to approve the merger with conditions or enforce legally binding agreements.
Officials from the Ministry of Information Technology and Telecommunication noted that the CCP’s decision on PTCL’s merger application has been delayed due to the company’s failure to provide relevant documentation. Additionally, an outstanding payment issue of $800 million remains unresolved. Although a settlement was reached for the release of $640 million, PTCL has yet to provide that amount.
The new investment option was introduced following SIFC’s intervention, which was sought by PTCL management. Meanwhile, PTCL is also facing notices from the Pakistan Telecommunication Authority (PTA) regarding its significant market position in various sectors of the telecom industry.
During the second phase of the merger review, the CCP requested information from the PTA to assess whether the merger would reduce competition or strengthen the dominant position of the involved parties. Instead of addressing the PTA’s objections, PTCL management has challenged the notices in the Sindh High Court.
PTCL submitted its merger application for Telenor Pakistan to the CCP on February 29, 2024, but the application contained flaws that were corrected by March 6, 2024.
