PTCL-Telenor Merger Could Crush Competition, CCP Warns

The Competition Commission of Pakistan (CCP) has raised serious concerns over the proposed merger between Telenor Pakistan and Pakistan Telecommunication Company Limited (PTCL), warning that the deal could significantly reduce competition in key telecom markets and hurt consumer choice.

According to documents reviewed under Regulation 10 of the CMCR 2016, the CCP evaluated multiple factors, including barriers to entry, market concentration trends, and the potential elimination of effective competitors. The watchdog’s review found that the merger would create a highly concentrated market structure in both wholesale and retail segments, increasing the risk of dominance by a single entity.

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The assessment revealed that the combined company, referred to as MergeCo, would control 42.7 percent of the wholesale domestic leased line market, nearly equal to PTCL’s existing share of 42.1 percent. Smaller operators would be left with marginal positions, limiting their ability to compete effectively. In the wholesale IP bandwidth market, PTCL already holds 64.5 percent, while Transworld Associates (TWA) accounts for the remaining 35.5 percent. Any further consolidation, the CCP warned, could entrench a duopoly, discouraging new entrants and innovation in a market that is already tightly held. The findings were equally stark for the retail long-distance and international (LDI) services segment, where MergeCo would emerge with 43.18 percent of the market, overtaking PTCL’s 32.67 percent, while other competitors lag far behind.

The CCP, citing its mandate under Regulation 10(h), expressed concern over the possible “removal of an effective competitor,” noting that such dominance could discourage innovation, reduce consumer choice, and raise the likelihood of collusive behavior in markets already prone to concentration. It warned that the dynamic growth and technological advancement of the telecom sector could be stifled if barriers to entry for new players were further reinforced. The report also highlighted that smaller operators such as LinkDotNet and Wateen could be significantly weakened, further consolidating market power in the hands of a few dominant players.

Industry experts say the CCP’s review reflects a growing worry about Pakistan’s telecom infrastructure, where just two or three companies already control most wholesale and backbone services. They argue that unchecked mergers could lead to higher prices for consumers, reduced service quality, and slower innovation in one of the country’s most vital sectors.

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While the merger has not been blocked, the CCP is expected to demand remedies or structural commitments before granting clearance. These measures could include requirements to protect smaller competitors, maintain fair pricing, and safeguard consumer interests. The final decision will likely set a precedent for how regulators balance the need for industry consolidation with the preservation of competitive markets.

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