ISLAMABAD: The Competition Commission of Pakistan (CCP) has ordered Pakistan Telecommunication Company Ltd (PTCL) to unbundle its operations following the approval of its merger with Telenor Pakistan. The decision aims to prevent anti-competitive practices and ensure transparency in the post-merger landscape.
The CCP’s detailed order, posted on its website, outlines strict conditions separating the new merged entity — comprising Ufone and Telenor Pakistan (MergeCo) — from PTCL and its other businesses. PTCL has committed in writing to comply with the order.
The merged entity is expected to become the second-largest cellular mobile operator (CMO) after Jazz, surpassing Zong. Currently, Ufone is the only loss-making CMO among the four, while the rest are profitable. As part of the conditions, the MergeCo must demonstrate profitability, and a third-party evaluator will be required to submit biannual performance reports to the CCP.
To enforce operational independence, the CCP has directed PTCL and MergeCo to maintain separate financial accounts for all service segments. They must also operate with entirely separate boards and management teams. Currently, some individuals hold overlapping roles in both PTCL and Ufone, including the CEO.
“No individual may simultaneously serve on the board or hold senior management roles in both PTCL and MergeCo,” the order states. Former board members or executives are prohibited from joining the other entity for at least three years after leaving their post.
Palwasha Khan, Chairperson of the Senate Standing Committee on IT and Telecom, welcomed the CCP’s decision. “As PTCL is a state-owned entity, it is our duty to safeguard public interest. The committee will seek quarterly accounts of MergeCo to ensure it remains profitable,” she said. The order also bars the exchange of commercially sensitive information between PTCL and MergeCo. Any reduction in interconnection circuits allocated to other telecom operators, including local loop, long-distance international, and cellular licensees, must be approved in advance by the PTA. Interconnect pricing or capacity must not be used to limit other operators’ access to MergeCo customers.
A senior CCP official stated that non-compliance could result in severe measures, including the possible divestment of PTCL’s telecom infrastructure or parts of its business, as permitted under Clause 13.19 of the order. Analysts believe the separation will improve transparency, limit cross-subsidisation, and support competitive offerings in the telecom sector.
