As Pakistan’s telecom sector stands at a crucial turning point, serious concerns are being raised about PTCL’s financial and strategic capacity to acquire Telenor Pakistan. Despite having secured a $400 million loan from the International Finance Corporation (IFC) to support the deal, PTCL now faces increasing pressure to justify its proposed $1 billion investment in Telenor Pakistan and Orion Towers.
This development comes at a time when the company is also expected to participate in the upcoming 5G spectrum auction, a move that would require significant capital and regulatory clarity. The timing has become even more sensitive as Khurrum Ashfaque, CEO of Telenor Pakistan, transitions to an international leadership role within the Telenor Group, just as the merger enters a decisive phase.
On August 5, senior executives from PTCL appeared before the Competition Commission of Pakistan (CCP) as part of ongoing proceedings under Section 11(6) of the Competition Act, 2010. The hearing focused on PTCL’s proposed acquisition of 100% shareholding in Telenor Pakistan and Orion Towers.
During the session, PTCL presented a detailed business plan highlighting efficiencies, projected synergies, and multi-year investment goals. The company attempted to convince the CCP of the transaction’s strategic value and its long-term benefits for market competition and consumers.
However, the CCP bench, led by Chairman Dr. Kabir Ahmed Sidhu and Members Salman Amin and Abdul Rashid Sheikh, voiced serious reservations. The Commission questioned whether PTCL, which is currently not profitable and is already burdened with losses at Ufone, has the financial bandwidth to support such a major acquisition while also committing to the spectrum auction.
Financial Transparency in Doubt
PTCL was also asked to provide consolidated regulatory accounts covering both Ufone and Telenor Pakistan. The Commission noted inconsistencies and gaps in the submitted documentation and directed PTCL to submit revised filings with both the Securities and Exchange Commission of Pakistan (SECP) and the CCP.
These concerns have raised alarms among industry insiders who believe that regulatory bottlenecks and financing ambiguity may delay the entire acquisition process and derail the 5G auction timeline, which has already slipped by over four months.
Government Intervention Underway
In light of the growing uncertainty, the federal government has reportedly stepped in to facilitate progress. Deputy Prime Minister Ishaq Dar is now mediating among stakeholders, including Etisalat, a major PTCL shareholder, and CCP, to prevent further delays to the country’s 5G spectrum roadmap.
The success or failure of this merger could have long-lasting implications on the sector’s competitive structure. With Jazz, Zong, Telenor, and Ufone currently making up the core telecom market, a PTCL–Telenor merger would likely alter the competitive balance, possibly reducing the number of major operators from four to three.
Key Questions PTCL Must Address
- How will PTCL justify a $1 billion investment when it already holds a $400 million IFC loan and reports consistent losses?
- What are the financial and operational plans to support both the acquisition and participation in the 5G spectrum auction?
- Can PTCL successfully integrate three major operations—Ufone, Telenor Pakistan, and Orion Towers—under one umbrella?
- What safeguards will be in place to ensure healthy market competition post-merger?