Pakistan’s $1 Billion Ufone –Telenor Merger Faces Major Roadblocks

Pakistan’s $1 Billion Ufone –Telenor Merger Faces Major Roadblocks

Pakistan’s long-awaited $1 billion Ufone and Telenor merger has hit a new obstacle after the Competition Commission of Pakistan (CCP) raised concerns over lapses by Pakistan Telecommunication Company Limited (PTCL). Despite being announced in December 2023, the merger remains under review due to regulatory issues, delays, and concerns about competition in the telecom sector.

Why the Ufone–Telenor Merger Matters

The proposed deal would make PTCL, the parent company of Ufone, the largest mobile operator in Pakistan by acquiring Telenor Pakistan. Market experts believe the merger could improve operational efficiency, expand coverage, and enhance service delivery. However, regulatory watchdogs warn it might reduce competition, harm innovation, and increase PTCL’s dominance.

CCP’s Concerns About the Merger

During a Senate IT Committee briefing, the CCP criticised PTCL for failing to:

• Submit a mandatory $1 billion investment plan for regulatory review.
• Provide a clear outline of efficiency gains expected from the merger.
• Respond on time to official information requests.

The commission further alleged that PTCL abuses its dominant position, pointing to its track record of non-compliance, collusion, and disputes with the Pakistan Telecommunication Authority (PTA)

PTCL’s Performance and Market Risks

The CCP also highlighted PTCL’s poor handling of Ufone, which has recorded consistent losses under its ownership. While the merger could bring economies of scale, regulators fear it may:

• Cement PTCL’s market dominance.
• Limit consumer choice in mobile services.
• Create barriers for new entrants.
• Restrict innovation in the telecom sector.

Under Pakistan’s Competition Act, the regulator can either block the merger or approve it under strict conditions.

Senate Committee Reactions

The Senate Standing Committee on IT and Telecom was informed that the merger decision may be finalised within two weeks, despite an 18-month-long review process.

Key highlights from the session included:

• Criticism of IT Minister Shaza Fatima’s absence from committee proceedings.
• Concerns over missing details of Ufone’s board members.
• Questions about board perks and allowances, including $5,000 stipends and foreign trips.

Data Breach Concerns in Pakistan

The Senate session also revealed alarming information about data theft in Pakistan:

• Stolen data worth Rs65 billion is being sold on the dark web.
• Personal details of nearly 300,000 Haj applicants are included.
• Even the PTA Chairman’s SIM data has been circulating online since 2022.

Senator Afnan Ullah warned of foreign pressure against passing data protection laws, urging the government to act quickly.

Telecom Sector Challenges

Beyond the merger and data concerns, senators raised issues about poor telecom services, particularly in Balochistan and along the Karachi–Sukkur Motorway, where call drops are frequent.

The PTA confirmed it is ready to proceed with a 5G auction in December 2025, but ongoing court cases could delay the rollout. The Senate committee urged closer coordination with the Attorney General’s office to resolve legal hurdles.

The Ufone–Telenor merger in Pakistan is at a critical stage. While it promises potential benefits like efficiency and scale, the regulatory challenges, competition concerns, and PTCL’s track record cast doubts on its approval. At the same time, Pakistan’s telecom sector faces pressing issues such as data breaches, poor service quality, and delayed 5G rollout. The coming weeks will be crucial in determining the future of Pakistan’s telecom landscape.