Competition Commission of Pakistan moves toward approving Telenor-PTCL merger

In Pakistan, the Competition Commission of Pakistan (CCP) has initiated steps toward granting approval for the merger between Telenor Pakistan and Pakistan Telecommunications Limited (PTCL). This movement comes about as a result of the intervention by the Special Investment Facilitation Council (SIFC). The CCP has sent a letter to PTCL’s legal representative, Rahat Kaunan Hassan, which references Section 11(11) of the Competition Act 2010. This letter presents a new settlement option to PTCL, emphasizing the conditions under which the merger can proceed. Sources indicate that the settlement proposal from the CCP involves an investment of around $1 billion from e&, a telecom company based in the UAE which currently holds the management control of PTCL. The CCP has also asked for specific timelines and detailed areas of investment from e&. The law, particularly Clause 11 of Section 11, enables the CCP to either approve the transaction if it meets specified criteria or prohibit it if it does not. Additionally, the commission can approve the merger under certain conditions, or subject to the parties entering legally binding agreements. Sources from the ICT ministry have mentioned that the decision regarding the PTCL merger application has been pending for approximately a year. This delay is largely attributed to PTCL’s management failing to provide necessary documents requested by the commission during this period. Furthermore, an unresolved issue regarding an outstanding payment of $800 million complicates matters, as there was previously an agreement with the prior government for PTCL to settle this at $640 million. However, PTCL has yet to fulfill this agreed payment. The new investment opportunity of $1 billion emerged following the SIFC’s intervention, a situation initiated after PTCL's management reached out to the council. As the CCP reviews the situation, both Telenor and PTCL await clarification on the merger's prospects and any related conditions, which could facilitate an important advancement in Pakistan's telecommunications sector.