The Competition Commission of Pakistan (CCP) has approved the first ever proposed merger of telecom industry of Pakistan – Mobilink and Warid. The merger approval is conditional upon compliance with the remedies imposed by CCP.
The bench hearing the matter comprised of Vadiyya Khalil, the Chairperson, Dr. Shahzad Ansar, Member Office of Fair Trade and Advocacy, and Ikram Ul Haque Qureshi, Member Cartels and Trade Abuse and Legal.
In its detailed Order, the Commission has undertaken a comprehensive competitive analysis of the merger to determine if it substantially lessens competition by creating or strengthening a dominant position. The assessment has been undertaken on the basis of extensive consultation with the merger parties, competitors and the Pakistan Telecommunication Authority (PTA).
While conducting its assessment, the Commission noted that the merger raised competition concerns, which were alleviated by countervailing factors and efficiencies. The Commission identified some persisting concerns in areas of spectrum concentration, infrastructure sharing, non-compete obligations, and joint control for which conditions have been imposed.
In relation to the spectrum concentration, the Commission has made spectrum sharing obligatory upon determination of inefficiently/underutilized capacity by PTA. With respect to infrastructure sharing, the Commission has directed the parties to provide guest operators on their cell sites a first option to buy the site, directly or through an auction if there is more than one guest operator. To facilitate entry in the future, the Commission has imposed an obligation to provide wholesale access to potential Mobile Virtual Network Operators (MVNOs).
To address the concern regarding the non-compete agreement, the term and scope of the non-compete obligations has been restricted. A firewall has been created between Mobilink and Abu Dhabi Group’s other businesses in the telecom industry. The remedies imposed on VimpelCom and Telenor Group by virtue of the Commission’s order dated March 17, 2011 to address the issue of joint control have been further strengthened through appointment of a third party reviewer who will report independent assessment of compliance to the Commission.