ISLAMABAD: The Pakistan Tele­communication Authority (PTA) has approved the merger of Telenor Pak­i­stan with Pakistan Tele­comm­unication Company Ltd (PTCL), though it imposed strict conditions to prevent abuse of market power and to bind the new entity to invest in upcoming spectrum auctions.

The PTA believes these measures are necessary to ensure fair competition in the telecom sector, particularly given PTCL’s dominant market position.

In line with an earlier decision by the Competition Commission of Pakistan (CCP), the PTA has also treated PTCL and its mobile arm Ufone (Pak Telecommu­nication Mobile Ltd, PTML) as separate legal entities, barring any cross-subsidy bet­ween them and requiring the maintenance of separate accounts.

Cross-subsidisation is the practice of using profits from one product, service or customer group to finance another that is losing money or sold at a lower price.

In an order issued on Thursday, the PTA granted merger approval for Telenor Pakistan, Telenor LDI Company (TLDI) and Orion Towers — which operates Telenor’s radio base towers — with PTCL (collectively termed the “notifying parties”).

New operator barred from exclusive deals, discriminatory pricing, cross-subsidisation

However, the newly emerged mobile operator comprising Ufone and Telenor Pakistan has been designated as “MergedCo” by the PTA.

The order has been signed by PTA Chairman Hafeezur Rehman, member finance Muhammad Naveed, and Dr Khawar Siddique Khokhar, member compliance and enforcement.

The PTA said the notifying parties and the MergedCo will be req­uired to maintain separate, detailed accounts for all business units, in line with prescribed standards.

Given PTCL’s status as the largest telecom service provider, the regulator has barred it from entering into agreements, directly or indirectly, or exclusive deals that would prevent other licensees from procuring bandwidth from PTCL to serve their own customers. All liabilities and obligations related to Telenor Pakistan, TLDI and Orion Towers will be assumed by PTCL. The notifying parties and PTML/MergedCo, individually and collectively, have also been directed not to introduce or modify brand names without prior written approval of the PTA.

PTCL and the MergedCo will not be allowed to discriminate among other telecom operators in matters relating to interconnection for local or international termination. Their pricing may not be used in a way that impedes or restricts other operators’ access to PTCL or MergedCo customers, and no preferential treatment is to be given to their affiliates or subsidiaries.

The PTA has prohibited cross-subsidisation between PTCL and MergedCo and directed both to maintain transparent pricing structures for wholesale and retail services. PTCL shall not cross-subsidise its retail or downstream services through revenues derived from upstream services, nor offer unreasonably low or predatory prices intended to foreclose competition in any market.

The order also states that the merged company will be required to participate in upcoming spectrum auctions to enhance coverage and resolve capacity issues.

Published in Dawn, December 5th, 2025