Pakistan’s much-anticipated telecom merger between Ufone and Telenor, valued at $1 billion, has run into serious delays. The merger was first announced in December 2023, but progress has slowed after the Competition Commission of Pakistan (CCP) pointed to issues on Pakistan Telecommunication Company Limited’s (PTCL) side. PTCL, which owns Ufone, reportedly failed to provide key documents needed for regulatory approval.
Competition Commission Raises Concerns
During a briefing to the Senate IT Committee, the CCP highlighted that PTCL had not submitted a $1 billion investment plan, which is a mandatory requirement for review. The regulator also noted that PTCL did not share details about expected efficiency gains. These lapses have created uncertainty around the merger’s progress, frustrating both the government and industry observers waiting for clarity.
Regulatory Issues and Non-Compliance
The CCP further criticized PTCL for delaying information requests and failing to keep proper accounting separation between its fixed-line business and Ufone. Such actions were seen as violations of regulatory rules. The watchdog even went as far as accusing PTCL of abusing its dominant position in the telecom sector. PTCL’s history of legal disputes and collusion with other operators was also flagged as a worrying sign.
Ufone’s Struggle Under PTCL
Another issue raised was Ufone’s weak performance under PTCL’s ownership. For years, Ufone has been posting losses, making it less competitive compared to other operators in Pakistan. The CCP expressed concern that if PTCL gains even more control by merging with Telenor, the problems could worsen. This could ultimately harm customers instead of bringing the improvements many had hoped for.
Risks of Market Dominance
While the merger promises scale and efficiency, the CCP warned of bigger risks. If PTCL takes over Telenor, it could cement its dominance in the telecom market. This might reduce competition, limit consumer choice, and raise barriers for new players entering the industry. It could also slow down innovation, leaving customers with fewer options and higher prices in the long run.
The Road Ahead for the Merger
Despite the hurdles, many industry experts still believe the merger will eventually happen. The deal has the potential to create Pakistan’s largest mobile operator, giving PTCL and Ufone a stronger position in the market. However, before the merger can proceed, PTCL will need to satisfy the regulator by submitting the required investment plan and proving the benefits outweigh the risks.
