Pakistan Telecommunication Company’s (PTCL) proposed takeover of Telenor’s local business will substantially reduce competition in the mobile market, the country’s antitrust regulator has warned.

The Competition Commission of Pakistan (CCP) stated it has now completed a phase 1 review of the deal, finding a tie-up between PTCL and Telenor Pakistan will strengthen the former’s dominant position, potentially leading to higher prices and diminished service quality. The regulator will now conduct an in-depth phase 2 analysis on the deal.

CCP noted PTCL has already been declared a significant market power operator, pointing to its strong position in offering a range of telecoms services.

In the mobile market, Pakistan has four operators; Jazz; Telenor; Zong and PTCL’s Ufone.

Veon-owned Jazz is the current market leader with around more than 70 million mobile connections, according to GSMA Intelligence. However, a tie-up between Telenor and Ufone will mean the new entity will pip Jazz slightly.

PTCL struck a deal to acquire the business in December 2023 for $500 million, as part of an ambition to ramp up investment in the local telecoms sector.

For Telenor, the sale is part of a wider strategy to reduce its presence in Asia-Pacific. It has already merged its business in Thailand and exited Myanmar.