PTBP Web Desk
The Competition Commission of Pakistan (CCP) is on the brink of announcing a pivotal decision concerning the acquisition of Telenor Pakistan Pvt Ltd and Orion Towers Pvt Ltd by Pakistan Telecommunication Company Limited (PTCL). This decision, which has been under meticulous review through the Phase-II process, aims to evaluate the impact on market competition, potentially setting precedents for future mergers and acquisitions in Pakistan’s telecom sector.
Salman Amin, a member of the CCP focusing on Office of Fair Trade, Cartels & Office of International Affairs, has confirmed that the announcement is imminent. He emphasized the CCP’s commitment to ensuring fair competition across all economic sectors, stating, “Whenever there is a merger and acquisition case, the Commission looks into the matter to ensure that competition is not adversely affected.”
The Phase-II review of this acquisition is significantly more involved than a typical Phase-I clearance, which is granted when there’s no immediate risk of market dominance abuse. Amin pointed out that this case, unlike the Jazz and Warid merger, is unique due to its scale and complexity. “Phase-II review is very deep dive and needs to look at it from different angles,” he explained, involving stakeholders like regulators, competitors, and players in both upstream and downstream markets. This comprehensive approach was necessitated by the transaction’s $500 million valuation, which could have long-term economic repercussions amounting to billions.
The primary focus during this review has been on potential risks of lessening of competition and the abuse of a dominant position. Amin clarified, “Dominant position is not an issue, abuse is an issue,” highlighting that the CCP aims to differentiate between merely holding a strong market position and the misuse of that position. This distinction is crucial in determining whether any remedial measures or conditions should accompany the approval of the acquisition.
Amin admitted that while PTCL has been cooperative by providing most of the requested information, some details are still awaited. This pending data has not delayed the decision process but underscores the thoroughness of the CCP’s approach. The decision will consider both the concerns raised by competitors and stakeholders during hearings and the remedies proposed to mitigate any negative impacts on competition.
The case also involves examining sector-specific laws under the Pakistan Telecom Act, where PTCL has been identified as a Significant Market Player (SMP). This status adds another layer of scrutiny to ensure that the acquisition does not contravene existing legal frameworks designed to prevent monopolistic behaviors or practices that could stifle market growth or consumer choice.
Amin drew comparisons with past privatization efforts, notably the failed case of PIA (Pakistan International Airlines), to underline the importance of due diligence. He critiqued the haste in previous transactions and advocated for a more strategic, well-prepared approach to mergers and acquisitions to avoid similar pitfalls.
