Islamabad: The Competition Commission of Pakistan (CCP) is currently engaged in a detailed Phase II analysis of the proposed merger between Pakistan Telecommunication Company Limited (PTCL) and Telenor Pakistan. This in-depth review aims to evaluate the merger’s potential effects on competition and service quality within Pakistan’s telecommunications sector.

According to Competition Commission of Pakistan, the regulatory body is assessing various aspects of the merger, including potential benefits like cost efficiencies and economies of scale that might boost the financial stability of the combined entity. Additionally, the review will consider improvements in network coverage, capacity increases, and service quality enhancements that could benefit consumers.

A primary concern that has emerged from the stakeholder consultations is the potential reduction in the number of cellular mobile operators in Pakistan from four to three, raising fears about decreased competition. There are also apprehensions about a possible disproportionate allocation of capacity and spectrum, which could negatively impact competitors. The CCP’s analysis spans several market segments, including Retail LDI Fixed-line Telecommunication, Retail Mobile Telecommunication, Wholesale Domestic Leased Lines, Wholesale IP Bandwidth, and Individual Mobile/Fixed Interconnect Market, to address these competition concerns comprehensively.

The CCP’s ongoing review also scrutinizes the potential for creating ‘capacity asymmetry’ in the market, a critical factor that could alter competitive dynamics. The Phase I order, issued on May 3, 2024, after an initial 30-day review period, indicated potential competitive impacts, leading to this more thorough Phase II examination. The commission now has 90 working days to complete its analysis and make a final decision.