Competition Commission of Pakistan (CCP) finally gave the approval for the Mobilink-Warid merger, which is the first one out of total four required approvals that both the telecom companies have to get before proceeding ahead for a smooth sail.
After this approval by CCP, both the telcos have yet to get clearance from Pakistan Telecommunication Authority (PTA), Securities & Exchange Commission of Pakistan (SECP) and the State Bank of Pakistan (SBP).
According to an official statement by Competition Commission of Pakistan;
During the assessment, CCP noted that the Mobilink-Warid 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.
The conditions that have been imposed by CCP are;
The Commission has made spectrum sharing obligatory upon determination of inefficiently/underutilized capacity by PTA. Spectrum is a very scarce resource all across the world and there is always an underutilized or inefficient utilization of spectrum by a telecom operator
On 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 the Commission’s order dated 17 March 2011 to address the issue of joint control have been further strengthened through the appointment of a third party reviewer who will report an independent assessment of compliance with the Commission.
The heads of both the telecom operators have expressed satisfaction over the decision of CCP. Commenting on the approval, Jean-Yves Charlier, CEO of VimpelCom, said, “We are pleased that the Competition Commission of Pakistan has approved our request to merge the two businesses. The combination of Mobilink and Warid will be a positive step for the development of technology and communications services in Pakistan”.
Once the Mobilink-Warid merger is approved from all the corners, together, the future entity will serve more than 45 million customers.
CEO of Mobilink has appreciated the role played by CCP. While acknowledging the role, Jeffrey Hedberg, President & CEO of the company said, “We are delighted to receive the CCP’s approval, which is an important milestone in the merger process and paves the way for other regulatory approvals. We look forward to progressing with the remaining regulatory bodies in the coming days.”
On the other hand, Mr. Adeel Bajwa, Chairman Board Executive Committee, Warid Telecom Pakistan said,”This is a milestone in the Telecommunication history of Pakistan. Such steps will go a long way towards enhancing Investor confidence in the country and the progress of Cellular Industry.”
Mobilink and Warid had jointly announced for a merger in November 2015.