ISLAMABAD: The proposed merger of Telenor Pakistan with PTCL and its subsidiary Ufone appears to be at a standstill, as the Competition Commission of Pakistan (CCP) has raised serious concerns over incomplete disclosures, questionable pricing structures, and the financial viability of the deal.
Sources told this publication that the CCP has written to PTCL and Ufone, pointing out multiple shortcomings in the information provided regarding the merger and related party transactions. The regulator noted that critical data was either missing, vague, or lacked comparability with competing operators such as Jazz, CMPak (Zong), and Telenor.
Among the gaps flagged:
- IDD Outgoing Data: Exact volumes, rates, and comparative charges to different operators between 2022–2024 were not shared.
- Colocation Revenues: PTCL only provided per-site rates for Ufone, while withholding details of terms, number of sites, and rates charged to competitors.
- IP Bandwidth and DPLC: Rates given lacked transparency, with PTCL reportedly offering Ufone discounted pricing without adequate justification.
- Transfer Pricing: No clarity on whether internal rates reflect cost-based or market principles, raising fears of cross-subsidization.
- Business Plan: PTCL failed to explain how it intends to finance heavy capital expenditures, 5G spectrum auctions, or cover persistent losses of both PTCL and Ufone.
The CCP letter also pressed PTCL to clarify whether Etisalat, its parent company, plans to inject equity to stabilize the merged entity, or whether the group intends to rely on further bank borrowing.
Regulators expressed frustration that PTCL had repeatedly submitted generic statements rather than precise answers to specific queries. “We are not able to confirm compliance with the principle of arm’s length transactions from the information provided,” the CCP noted, warning it reserved the right to draw adverse inferences.
Industry insiders say the CCP’s pointed queries have cast a shadow over the high-profile merger, already delayed for months. Observers believe that unless PTCL demonstrates transparency and a credible financial plan, the merger with Telenor Pakistan could face further hurdles.
