Pakistan's telecommunications regulator has formally urged the government to resolve a long-pending telecom merger case that threatens to delay the country's first 5G spectrum auction, planned for April, officials said.
The Pakistan Telecommunication Authority (PTA) sent a letter to the Ministry of Information Technology and Telecom requesting a decision on the proposed merger between Pakistan Telecommunication Company Limited (PTCL) and Telenor Pakistan, according to sources familiar with the matter.
The Competition Commission of Pakistan (CCP) has held up approval of the merger between state-founded PTCL, now controlled by UAE-based Etisalat, and Norwegian-owned Telenor Pakistan over concerns it would substantially reduce competition in the telecommunications sector.
This regulatory uncertainty has complicated Pakistan's plans to join neighboring countries in rolling out advanced 5G mobile services this year. The PTA has hired U.S.-based consultancy firm National Economic Research Associates Inc. (NERA) to advise on spectrum allocation and auction design, but their final recommendations require clarity on how many operators will participate.
Currently, three companies would be eligible to bid if the merger proceeds, while four would participate if the merger is blocked, significantly altering auction dynamics and potential spectrum valuations.
A high-level delegation from Etisalat arrived in Islamabad this week for discussions on both the proposed merger and an outstanding $800 million payment from PTCL's 2006 privatization deal, adding urgency to the government's decision.
Industry sources also revealed that Chinese telecom companies operating in Pakistan are lobbying for permission to invest the upfront license fees directly into 5G infrastructure development rather than making advance payments to the government. This proposal comes as Pakistan's government seeks to maximize revenue from the spectrum auction while also accelerating digital infrastructure development.
Balancing act
Finance Minister Muhammad Aurangzeb recently informed Pakistan's National Assembly that the CCP's concerns include PTCL's lack of financial transparency regarding transactions with its mobile subsidiary Ufone, and the company's unique integrated license that allows it to offer a full range of telecommunication services.
The CCP is expected to deliver its final recommendations after completing Phase II of its merger review, which includes stakeholder consultations and assessment of potential remedies to address market concentration concerns.
Industry analysts say the government faces a difficult balancing act between generating much-needed revenue through the spectrum auction and maintaining healthy competition in the telecom sector, which serves over 191 million mobile subscribers across Pakistan.
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