The Auction Advisory Committee has decided to seek federal government intervention to expedite the Telenor-Ufone acquisition deal, as delays in the process are impacting Pakistan’s upcoming 5G spectrum auction.
High-Level Meeting on 5G Auction Preparations
According to sources, the decision was taken during a recent high-level meeting chaired by Federal Finance Minister Muhammad Aurangzeb at the Finance Division. The Pakistan Telecommunication Authority (PTA) provided a detailed briefing on Pakistan’s preparations for the 5G spectrum auction and the challenges affecting its execution.
Consultant Hired for 5G Auction Strategy
PTA officials informed the committee that an international consultant was engaged in November 2024 under Public Procurement Regulatory Authority (PPRA) rules to assess the telecom market and consult with key stakeholders. The consultant has now completed the assessment, and pricing structures, auction design, and network rollout plans are expected to be finalized soon. The 5G spectrum auction is scheduled for mid-2025.
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Telenor-Ufone Deal Delays Affecting 5G Auction
The PTA identified key challenges in conducting the 5G auction, including delays in the Telenor Pakistan acquisition by Ufone (PTCL Group). The Competition Commission of Pakistan (CCP) has yet to issue a final decision, leading to uncertainty for both companies regarding their participation in the auction. The unresolved case prevents PTA from determining whether the telecom sector will operate with three or four players, complicating the spectrum cap formulation.
Legal Challenges in Spectrum Allocation
PTA also highlighted litigation issues surrounding key 5G spectrum bands:
- The 2600 MHz band, a prime candidate for 5G services, has been under legal dispute since 2007.
- The 1800 MHz band is also subject to ongoing litigation, further complicating the auction process.
These legal uncertainties pose risks to the timely rollout of 5G services in Pakistan.
CCP’s Concerns Over Market Competition
The Competition Commission of Pakistan (CCP) has completed Phase I of its review of the Telenor-Ufone merger. The initial findings suggest that the acquisition could reduce competition in the telecom sector. The Phase II review has been complicated due to challenges in assessing market dominance and potential industry concentration. Several hearings and stakeholder consultations have been conducted to evaluate the acquisition’s impact on market dynamics.
Financial Backing Secured, but Regulatory Hurdles Remain
In June 2024, Pakistan Telecommunication Company Limited (PTCL) signed loan agreements with an International Finance Corporation (IFC)-led consortium, securing up to $400 million in financing for acquiring Telenor Pakistan and Orion Towers (Pvt.) Limited. Despite financial backing, regulatory delays continue to hinder the deal’s finalization, impacting the telecom market and 5G launch timeline.
Key Government Officials Present at the Meeting
The meeting was attended by:
- Minister for Industries and Production Rana Tanveer Hussain
- Minister of State for IT and Telecommunication Shaza Fatima Khawaja
- Chairman PTA
- Secretary Ministry of IT
- Secretary Ministry of Law
- Other senior government officials
The Auction Advisory Committee aims to resolve these regulatory and legal challenges swiftly to ensure the smooth rollout of 5G services in Pakistan.
