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| PTCL’s Delays Put $1 Billion Ufone-Telenor Merger on Hold |
The much-anticipated $1 billion merger between Ufone and Telenor Pakistan has hit a major roadblock. The Competition Commission of Pakistan (CCP) revealed that lapses on the part of Pakistan Telecommunication Company Limited (PTCL) are stalling progress, raising fresh concerns about dominance, transparency, and fair competition in the telecom sector.
For Pakistan’s fast-evolving digital economy, this deal could reshape the mobile market. But according to the regulator, PTCL’s actions—or lack of them—are making it difficult to move forward.
Highlights
- PTCL failed to submit its $1 billion investment plan required for merger clearance.
- CCP flagged PTCL’s history of anti-competitive behavior, including court challenges against PTA rules.
- Concerns raised about cross-subsidisation risks between Ufone and PTCL.
- Past penalties, including a Rs70 million fine in the International Clearing House case, weigh on PTCL’s record.
- CCP warned the merger could reduce competition, limit consumer choice, and raise entry barriers.
Why the Merger Is Stuck
The CCP told the Senate Standing Committee on IT that PTCL has repeatedly missed deadlines to provide its detailed investment plan—an essential document to assess the benefits and efficiencies of the proposed merger. Without it, regulators cannot evaluate how the deal might improve services or competition.
Another sticking point is PTCL’s frequent legal battles with the Pakistan Telecommunication Authority (PTA). The company has secured stay orders against several PTA regulations, including the Significant Market Power (SMP) ruling. Because of this, PTA currently has no control over the tariffs PTCL charges other operators, raising red flags about unchecked pricing power.
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Competition Concerns
The regulator also highlighted structural issues. PTCL holds a Long Distance International (LDI) licence, while Ufone operates under a Cellular Mobile Operator (CMO) licence. Despite different business categories, both are under joint management. According to the CCP, this overlap increases the risk of cross-subsidisation, where one arm of the business unfairly supports another.
And there’s history here. PTCL has already been penalised for anti-competitive practices in the International Clearing House (ICH) case, where it was fined Rs70 million along with 13 other operators. The penalty was upheld by the Competition Appellate Tribunal earlier in August 2025.
PTCL’s Struggles with Ufone
Adding to the concerns is PTCL’s track record with Ufone. Despite years in the market, Ufone has consistently reported losses. The CCP suggested that before green-lighting such a large-scale merger, regulators must consider whether PTCL has demonstrated the ability to turn Ufone into a profitable, competitive player.
What’s at Stake for the Telecom Industry
Mergers can often spark growth, fuel innovation, and expand network coverage. But in this case, the CCP warned that the PTCL-Ufone and Telenor consolidation might do the opposite. By strengthening PTCL’s already dominant position, the deal could:
- Create a highly concentrated mobile market.
- Limit consumer choice and innovation.
- Raise barriers for new entrants.
- Fail to deliver promised efficiencies.
In regulatory terms, this is what’s known as a Substantial Lessening of Competition (SLC).
Latest Update
As of now, the CCP has not approved the deal. Under Section 11(11) of the Competition Act, the regulator has the authority to block the merger entirely or impose strict, legally binding conditions. The decision will hinge on whether PTCL can address the compliance gaps and provide a credible plan that satisfies competition concerns.
FAQs
1. Why is the Ufone-Telenor merger important?
It could create a stronger player in Pakistan’s telecom market, potentially improving services and expanding coverage.
2. Why has the CCP stalled the merger?
Because PTCL hasn’t submitted the required investment plan and has a history of regulatory non-compliance.
3. What risks does the merger pose?
The CCP fears it could reduce competition, limit consumer choice, and increase PTCL’s dominance.
4. Has PTCL faced penalties before?
Yes. It was fined Rs70 million in the ICH case for collusion, and the penalty was upheld in August 2025.
5. Can the merger still go through?
Possibly. But only if PTCL provides the missing documents and convinces regulators that competition will not be harmed.
Conclusion
The $1 billion Ufone-Telenor merger has the potential to reshape Pakistan’s telecom industry, but PTCL’s compliance lapses are holding it back. Unless the company can rebuild trust with regulators and show a clear path toward fair competition, the deal risks being blocked altogether.
For now, consumers, investors, and industry players are all watching closely to see whether this mega-merger will move forward—or collapse under regulatory pressure.