Govt Asked to Intervene in Telenor-Ufone Merger

The Auction Advisory Committee has decided to approach the federal government for intervention in concluding the Telenor-Ufone acquisition deal, as delays in the process are affecting the upcoming 5G spectrum auction. Sources told ProPakistani the decision was taken during a meeting held a few days before under the chairmanship of Federal Finance Minister Muhammad Aurangzeb at the Finance Division. The Pakistan Telecommunication Authority (PTA) presented a detailed briefing on the country’s preparations for the 5G spectrum auction and the challenges being faced in the process. According to sources, PTA officials informed the committee that an international consultant was engaged in November 2024 to assess the telecom market and engage with key stakeholders. The consultant, hired under the Public Procurement Regulatory Authority (PPRA) rules, has completed the assessment, and the pricing structure, auction design, and network rollout plans are expected to be finalized in the coming days. The spectrum auction is scheduled for mid-2025. According to sources, the PTA highlighted the challenges in conducting the 5G auction, citing delays in the acquisition of Telenor Pakistan by Ufone (PTCL Group). The Competition Commission of Pakistan (CCP) has yet to decide on the acquisition, creating uncertainty for both companies regarding their participation in the spectrum auction. The unresolved case is preventing the PTA from determining whether the telecom market will operate with three or four players, affecting the formulation of a spectrum cap. PTA also pointed out additional hurdles, including ongoing litigation over key spectrum bands. The 2600 MHz band, considered a prime band for 5G services, has been under litigation since 2007, while the 1800 MHz band is also subject to legal disputes. These legal challenges pose risks to the timely launch of 5G services in Pakistan. The Competition Commission of Pakistan has already completed its Phase I review of the Telenor-Ufone merger, concluding that the deal could substantially lessen competition in the telecom sector. The Phase II review process has been complicated by difficulties in assessing market dominance and increased industry concentration. Multiple hearings and consultations with stakeholders have been conducted to evaluate the potential impact of the acquisition. Pakistan Telecommunication Company Limited (PTCL) had signed formal loan agreements in June 2024 with an International Finance Corporation (IFC)-led consortium to secure up to $400 million in financing for the acquisition of Telenor Pakistan and Orion Towers (Pvt.) Limited. Despite securing financial backing, regulatory delays continue to hinder the finalization of the deal, impacting the overall telecom market and 5G rollout plans. The meeting was attended by Minister for Industries and Production Rana Tanveer Hussain, Minister of State for Information Technology and Telecommunication Shaza Fatima Khawaja, Chairman PTA, Secretary Ministry of Information Technology, Secretary Ministry of Law, and other senior officials.