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Competitors worry about telecom merger | The Express Tribune

ISLAMABAD:

As one of the biggest mergers in Pakistan’s telecom sector is underway, the Competition Commission of Pakistan (CCP) has said that the decision to acquire Telenor Pakistan by Pakistan Telecommunication Company Limited (PTCL) could be delayed as competitors expressed concerns about the project. .

In a statement, the PCC said a pre-merger application regarding PTCL’s intention to acquire 100% of the shares of Telenor Pakistan and Orion Towers was received on February 29, 2024.

However, the application was submitted with incorrect fees and the remaining fees were sent to the commission on March 6, 2024. Later, to complete due diligence, additional information was requested, but PTCL’s legal teams did not had not yet submitted the required information.

The PCC stressed that “once all relevant documents and information are received, the commission has 30 working days to complete its due diligence, for the first phase of review.”

Meanwhile, the PCC received concerns from a competitor regarding PTCL’s proposed acquisition of Telenor, saying the move would reduce the number of competitors offering telephony services and further delay the due diligence process.

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Currently, four players are working in the telecommunications industry, led by Jazz and including Telenor, Zong and Ufone. Ufone is a subsidiary of PTCL and after the acquisition of Telenor, Ufone and Telenor will merge to become as big as Jazz.

Currently, the CCP’s merger department is processing 21 applications, which also include the acquisition of Telenor.

Another major merger in the telecommunications sector took place in 2016 when Jazz acquired Warid. At that time, the PCC conducted a Phase II review, which also covered stakes in Jazz’s parent companies.

Furthermore, during the Phase II review, the CCP teams discovered that Telenor International held a stake in Veon Limited, the parent company of Jazz.

Veon, a multinational telecommunications services company domiciled in the Netherlands, has been ordered by the CCP that Telenor International shareholders not attend Jazz-related items on the agenda of board meetings of Veon, to ensure that there is no collusive decision-making between Telenor and Jazz’s parent company. this could impact competition in the telecommunications sector in Pakistan.

Published in The Express Tribune, March 26th2024.

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