Major stakeholders in Pakistan’s telecom industry, including Zong, have raised significant concerns regarding the acquisition of Telenor Pakistan and Orion Towers by Pakistan Telecommunications Limited (PTCL). They caution that this merger could result in a monopoly over spectrum allocation, with the combined entity anticipated to control 34.4% of the total spectrum in the retail mobile market.
The Competition Commission of Pakistan held its fourth session on Phase II Merger Review under the chairmanship of Dr. Kabir Ahmed Sidhu and members Salman Amin and Abdul Rashid Sheikh. At the hearing, Zong’s representative stressed that for Mobile Network Operators (MNOs), a very important factor regarding market power is the spectrum allocation.
CM Pak, the mother organization of Zong, was represented by Asad Ladha in the hearing and submitted that the CCP ought to impose some sort of obligation on the deal to avoid abuse of the dominant position and unfair competition and submitted that a merger may lead to a lack of availability of the spectrum. PTCL is represented by Rahat Kaunain and submitted that no impending competition concerns will arise but shall provide details if the commission requires it to do so.
The PTA confirmed that it does not have any additional spectrum on the prized 900 MHz band at this time, while new allocations could be made by 2025. Zong expressed concerns that the combined spectrum share of Telenor and Ufone would reach 39.60%, significantly higher than Zong’s 19.80%, potentially creating an imbalance in the market.
The hearing has been rescheduled for October 24, 2024, and will continue to explore concerns surrounding market concentration and the potential competitive implications of the merger. The CCP review will delve further into the acquisition’s possible effects on Pakistan’s telecom industry and its competitive landscape.
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