Telenor-Ufone merger in Pakistan hits regulatory snag

ISLAMABAD (Zubair kasuri): A year after the announcement that Pakistan Telecommunication Company Ltd’s (PTCL) Ufone would acquire Telenor Pakistan, the deal has hit a regulatory hurdle, delaying the merger of two of the country’s major mobile operators.

Sources within the Pakistan Telecommunication Authority (PTA) revealed that the merger, initially agreed upon in December 2023, has been held up by the Securities and Exchange Commission of Pakistan (SECP).

Despite the Competition Commission of Pakistan (CCP) already clearing the deal after lengthy hearings, the SECP has been conducting its own review for the past six months.

The SECP was expected to announce a decision by the end of December 2024, but has yet to do so. This delay has reportedly impacted the development plans of both companies and has raised concerns about foreign investment in Pakistan’s telecom and IT sectors.

“Both companies have fulfilled all legal requirements. It’s unclear why the SECP is delaying the decision,” a source stated.
A senior official in the Ministry of IT and Telecom suggested that the SECP’s inaction may be due to pressure from other major telecom players who would be disadvantaged by the merger.

They also pointed to PTCL’s ongoing dispute with Etisalat, another foreign telecom company operating in Pakistan, over an unpaid $800 million debt dating back to 2007.

The merger would create a combined entity with over 75 million subscribers, making it the largest mobile operator in Pakistan. Ufone also plans to install over 2,600 new mobile towers to improve coverage, potentially increasing competition and forcing other operators to improve their services.

A senior PTA official confirmed that the authority is ready to swiftly approve the merger once the SECP gives the green light. “If the SECP makes a decision today, PTA can issue its approval within a month,” the official said.