ISLAMABAD – Pakistan’s telecom industry is about to witness a major merger of Telenor Pakistan and PTCL but Competition Commission of Pakistan (CCP) raised serious concerns, warning that the deal could reduce competition in key wholesale and retail markets, limit consumer choices, and stifle innovation.
Regulators are expected to seek remedies or binding commitments before giving approval to ensure fair competition.
In a detailed review under Regulation 10 of CMCR 2016, officials shed light on market concentration trends, barriers to entry, countervailing power, and the potential disappearance of effective competitors. It said this merger could create a telecom giant that dominates the industry and stifles innovation.
In wholesale domestic leased line segment, the merged entity dubbed MergeCo would control a staggering 42.7% of the market, nearly matching PTCL’s existing 42.1%. Smaller providers could be virtually sidelined.
The wholesale IP bandwidth market paints an even grimmer picture. PTCL already controls 64.5%, with Transworld Associates (TWA) holding the remaining 35.5%. CCP warned that the merger risks cementing a duopoly, potentially blocking any new entrants from gaining a foothold.
Retail long-distance and international (LDI) services are not spared either. MergeCo would command 43.18% of this segment, a sharp rise from PTCL’s 32.67%, leaving other competitors far behind. Analysts warn that such dominance could curb innovation and limit consumer choices.
Citing Regulation 10(h), CCP stressed that removing effective competitors could foster collusive behavior in a sector already marked by high concentration. Vertical integration and the sidelining of smaller operators like LinkDotNet and Wateen could further destabilize competition.
Industry experts say the CCP’s scrutiny highlights the dangers of allowing just two or three companies to dominate Pakistan’s telecom backbone. With consolidation accelerating, regulators face the tough task of balancing growth with consumer protection.
CCP is expected to demand binding commitments or remedies before approving the merger, aiming to preserve fair competition and safeguard consumer interests.
PTCL has proposed a $1 billion investment plan backed by UAE-based e&, but regulatory delays and PTCL’s past anti-competitive practices have complicated approval. CCP is expected to issue a final decision within the coming weeks, which will shape the future of Pakistan’s telecom industry.
