The Auction Advisory Committee has decided to approach the federal government to expedite the Telenor-Ufone acquisition deal, as persistent delays threaten to disrupt Pakistan’s much-anticipated 5G spectrum auction scheduled for mid-2025.
According to sources, the decision was made during a recent meeting chaired by Federal Finance Minister Muhammad Aurangzeb at the Finance Division. The Pakistan Telecommunication Authority (PTA) provided a detailed briefing on the country’s 5G spectrum auction preparations and outlined key challenges affecting the process.
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Regulatory Delays in Telenor-Ufone Acquisition Impacting 5G Rollout
PTA officials informed the committee that an international consultant was engaged in November 2024 under Public Procurement Regulatory Authority (PPRA) rules to assess Pakistan’s telecom market and consult key stakeholders. The consultant has completed the assessment, and the pricing structure, auction design, and network rollout plans are expected to be finalized soon.
However, delays in the Telenor Pakistan acquisition by Ufone (PTCL Group) have raised concerns. The Competition Commission of Pakistan (CCP) has yet to make a final decision on the merger, creating uncertainty about the number of telecom operators participating in the upcoming 5G auction. The PTA highlighted that without clarity on whether the market will operate with three or four players, it is difficult to establish a spectrum cap, a crucial factor in the auction process.
Legal Hurdles and Spectrum Litigation Pose Additional Risks
Apart from the acquisition delays, PTA also pointed out ongoing litigation over key spectrum bands:
- The 2600 MHz band, considered a prime frequency for 5G services, has been under litigation since 2007.
- The 1800 MHz band is also subject to legal disputes, further complicating Pakistan’s 5G rollout plans.
These legal issues pose significant risks to the timely launch of 5G services in Pakistan, making regulatory intervention necessary.
Competition Commission’s Review Process Delays Merger Approval
The CCP has already completed its Phase I review of the Telenor-Ufone merger, concluding that the deal could substantially lessen competition in Pakistan’s telecom sector. The Phase II review is facing hurdles due to complexities in assessing market dominance and the impact of industry consolidation. Multiple hearings and consultations with stakeholders have taken place, but a final decision remains pending.
Financial Backing Secured, but Regulatory Delays Continue
Despite these setbacks, Pakistan Telecommunication Company Limited (PTCL) secured up to $400 million in financing for the acquisition of Telenor Pakistan and Orion Towers (Pvt.) Limited in June 2024 through an International Finance Corporation (IFC)-led consortium. However, regulatory delays continue to stall the finalization of the deal, affecting the overall telecom market and 5G deployment.
Government Urged to Intervene to Prevent Further Delays
The high-level meeting was attended by Minister for Industries and Production Rana Tanveer Hussain, Minister of State for IT & Telecom Shaza Fatima Khawaja, Chairman PTA, Secretary Ministry of IT, Secretary Ministry of Law, and other senior officials.
Given the challenges posed by regulatory and legal roadblocks, the Auction Advisory Committee is now seeking direct government intervention to fast-track the acquisition approval, ensuring that Pakistan’s 5G spectrum auction proceeds without further disruptions.
The delays in Telenor-Ufone merger approval and spectrum litigation are significant barriers to Pakistan’s digital transformation. With 5G technology set to revolutionize connectivity, ensuring a transparent, efficient, and timely spectrum auction is critical for economic growth and technological advancement.
