PTCL inches closer to Telenor acquisition, but Phase 2 hurdle remains
PTCL’s long-awaited acquisition of Telenor Pakistan appears to be nearing its first hurdle, with the Competition Commission of Pakistan (CCP) expected to finalize the Phase 1 review by the end of March. However, the potential for a Phase 2 review lingers, raising questions about the timeline for the merger’s completion.
Phase 1 Nears Completion
Sources within the CCP reveal that they are nearing the conclusion of their initial assessment. The Phase 1 review, mandated to be completed within 30 days of application acceptance, focuses on identifying potential dominance in the market post-merger.
Market Share Concerns Mitigated (for Now)
Given PTCL’s existing ownership of Ufone (fourth largest) and Telenor’s third-place position, their combined subscriber base (70.06 million) would fall just short of Jazz’s market lead (70.95 million). This seemingly balanced landscape suggests a smooth Phase 1 approval.
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Potential Phase 2 Review Looms
However, with PTCL’s government and e& (Emirates Telecommunications Group) control translating to a dominant 62% stake, concerns about market monopoly might trigger a Phase 2 review. This more in-depth analysis, lasting 90 days, would scrutinize the merger’s impact on competition.
Precedence for Scrutiny Exists
The CCP has a history of such scrutiny. In 2016, Jazz’s acquisition of Warid Telecom prompted a Phase 2 review due to similar dominance concerns.
Possible Triggers for Phase 2
Ufone officials acknowledge the possibility of a Phase 2 review if complaints arise from competitors or if the CCP prioritizes enhanced transparency.
Impact on Completion Timeline
A successful Phase 1 paves the way for a potential merger by the next fiscal year. However, a Phase 2 review would significantly delay the process.
Merger Hinges on CCP’s Scrutiny
While PTCL appears close to clearing the initial hurdle, the potential for a Phase 2 review adds uncertainty to the timeline for finalizing this major telecom merger in Pakistan.
