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PTA imposes a number of conditions on merged entity designed to protect competition in Pakistan.
The Pakistan Telecommunication Authority (PTA) on Monday gave its approval to Mobilink’s planned acquisition of rival Warid Telecom, subject to certain conditions.
Having assessed the impact of the merger on Pakistan’s mobile market, looking at pricing of services, spectrum allocations and licensing, amongst other things, the PTA said it approved the companies’ request to merge.
However, the onus is on the merged entity to ensure the move brings benefits to consumers.
"The merged entity shall ensure [it plays an] active role in enhancing competition other than [on] price, such as innovation, better quality of service, wider network coverage and enhanced speeds," the PTA said.
Other more concrete conditions include requiring the merged outfit to "reasonable readjust/rearrange spectrum assignments as and when required by the PTA," as well as restrictions on the disposal of cell sites. With regard to the latter, the PTA insists that should it elect to close down redundant base station sites, Mobilink/Warid must give first refusal to any other company using the site who might wish to purchase it. It also states that the merged entity should seek to reuse any decommissioned base stations to extend services to remote areas.
The regulator is also keen to ensure that the merged entity’s tariff plans are not "in any way anticompetitive, unfair or burdensome." The firm will be required to gain PTA approval for its tariffs.
Without commenting on the specific conditions, Mobilink issued a statement welcoming the PTA’s decision, describing it as "yet another milestone in the regulatory process."
The deal won the approval of the Competition Commission of Pakistan (CCP) two months ago, but the deal still remains subject to further regulatory approvals and the usual closing conditions, Mobilink said.
"I am confident that the combination of the two businesses will benefit customers through a best-in-class mobile and high-speed network, and contribute to the overall development of the telecommunications sector in Pakistan as an integral part of the economy," added Mobilink CEO Jeffrey Hedberg.
Mobilink agreed to acquire Warid Telecom in its entirety in November last year in a deal of undisclosed value that will leave Warid’s current owner, the Dhabi Group, with a 15% stake in Mobilink.
Together the two operators had 49.6 million customers at the end of April, according to PTA statistics, giving them a 37.4% share of the market.
Mobilink is already Pakistan’s market leader by subscribers with just over 29%, but number two operator Telenor is hot on its heels with about 1 million fewer customers.
