A Detailed Look at CCP’s Approval of Mobilink-Warid Merger

Competition Commission of Pakistan on Monday approved the proposed merger of Mobilink and Warid in a decision that is hailed by the industry. While CCP didn’t object on the merger itself but imposed certain conditions by binding the merged company to comply with such conditions to carry out the merger process.

In its detailed decision, a copy of which is available with ProPakistani and is produced at the end of this story, CCP said that it is approving the merger even after considering competitors’ concerns, the countervailing factors and the efficiencies.

CCP bench hearing the matter comprised of Vadiyya Khalil, the Chairperson, Dr. Shahzad Ansar, Member Office of Fair Trade & Advocacy, and Ikram Ul Haque Qureshi, Member Cartels & Trade Abuse and Legal.

Merger case was presented by Mobilink, VimpelCom and Warid Telecom. Telenor Pakistan and Telenor ASA were also included in the hearing after their own request. CCP also called PTA in the hearings as a regulatory body for the telecom sector.

Conditions that CCP imposed, along with approval, are as following:

Spectrum Concentration 

At present, the total spectrum allocated to five mobile operators in the country is 108 MHz, out of which the merged company will have a combined spectrum of 37.2 MHz (combined spectrum of Mobilink and Warid) after the merger, which would be 34.44% of total spectrum that’s allocated to telcos.

Apart from the overall size of the spectrum allocated to an operator, each frequency band carries unique properties in terms of its spectral efficiency and propagation properties on wireless mediums, making certain frequencies more attractive than others.

CCP said that merged company will hold the largest portion of the 900 MHz frequency band i.e. 12.4 MHz, which can be used for both GSM (2G/3G) and LTE networks. Not to mention, no further allocation of spectrum is possible in 900MHz band.

Merged company will also have 14.8MHz in 1800MHz band — that also allows for LTE deployments — that accounts for 21.49% of total spectrum allocated in this band.

Then in 2100MHz band, the merged company will have 10MHz of spectrum that’s usable for 3G.

With respect to spectrum shares of merged company, the Commission said that it is necessary to remedy the disproportionate allocation.

In this regards, PTA is asked to develop a spectrum sharing framework, after which in a case when new operator — that wants to operate in the country — comes in and there’s no additional spectrum available then merged company will be allowed to negotiate the terms with new entrant to share the spectrum with it.

PTA is asked to finalize the spectrum sharing framework with-in six months.

Merged company, however, is restricted from entering into any spectrum sharing or trading arrangements with Telenor Pakistan due to structural link between Telenor ASA and VimpelCom unless approved by the PTA and the
Competition Commission of Pakistan.

Wholesale Access to MVNOs

Competition Commission of Pakistan recommended PTA to carry out a reassessment of its current MVNO framework in consultation with all stakeholders including mobile operators and to take reasonable steps to encourage and facilitate MVNO entry in Pakistan.

Commission recommended PTA that it may consider imposing a wholesale access obligation on all mobile operators currently operating in Pakistan on a non-discriminatory basis.

Once PTA is able to develop this new framework on MVNOs, merged company is binded to provide wholesale access rights to MVNOs, including but not limited to network access, call origination, call termination, international roaming for voice/SMS and data services, and access to portability database.

Such access to wholesale call origination shall be granted on fair and reasonable commercial terms and conditions.

Interconnection

Competition Commission of Pakistan, in its decision, binded merged company to continue providing interconnection on the same terms to all other mobile network operators in accordance with the Reference Interconnection Offer
(RIO) approved by PTA.

Competition Commission offered all mobile operators to approach the commission in case of any anti-competitive behavior.

Infrastructure Sharing

Ongoing Infrastructure Sharing Agreements between Warid/Mobilink and other mobile companies in cases where merged company will plan to discontinue its sites should be re-negotiated.

Not to mention, almost 4,000 sites are supposed to be decommissions when Mobilink and Warid will be merged into one company.

In such renegotiation, merged company will do one of following:

  • If there’s only one tenant on a shared-site, merged company will allow such guest operator to buy all fixtures, tower or any other equipment on site on fair-value and reasonable commercial terms and conditions with-in a period of 30 days from initial notice
  • If there is more than one tenant on a Site, then merged company will auction all fixtures, tower or any other equipment on such Sites subject to a fair value reserve price within the period of thirty (30) days from initial notice. Upon successful sale, the acquiring mobile company will continue to host the other guests on the same terms and conditions.
  • If parties cannot agree on the fair value then price would be determined by an independent valuer mutually agreed between the parties who shall carry out the valuation within fifteen (15) days from reference.
  • If the sale is not completed within the thirty (30) day period of reference then guest operator(s) would vacate the Site
  • However, for a period of five months from the date of Order, merged company will not request an mobile operator that is a guest on its Sites to leave the site without granting one of the two options noted

Join Control / Cross Holding 

Just because VimpelCom is partly owned by Telenor ASA, and that Telenor Pakistan is fully owned by Telenor ASA, while Mobilink is fully owned arm of VimpelCom, CCP said that merger must not raise any cross-holding or joint control issues in local market.

Commission said that merging parties will appoint an independent third-party-reviewer (TPR) to ensure compliance on current merging companies’ cross-holding with Telenor Pakistan and to ensure the compliance of CCP’s earlier decisions at the time when VimpelCom had acquired Orascom.

Commission, in its decision, said that this term will cease in case Telenor ASA sells its shares in VimpelCom, which it has intended lately.

You can download CCP’s detailed decision on merger by clicking this link (PDF File – 7MB)

Tech reporter with over 10 years of experience, founder of ProPakistani.PK


  • Yasir Ali Raza

    AAMiR Bhai Please btaiy ga k tmam telecos k pas ab kitni kitni frequency ho jay ge

    • aamir7

      Here you go:

      • Yasir Ali Raza

        Great Info AAMiR Bhai Thanks ALot

      • Zafar Abbas Rizvi

        Dear Aamir
        Warid’s existing license will be expired in 2019 I suppose. will mobilink have to renew warid’s 900 and 1800 MHz spectrum for further use of LTE on it or else?

        • Yasir Ali Raza

          Zafar Bhai 2019 tak chance ha 5G aany ka , or jitni late 3G , 4G hoi Pakistan mein itni late 5G ni ho ge , is liy agr license khatam ho b jaen to obviously agr 5G nhi aati Pakistan mein to license renew krwany he parren gy , ziada chance hein k 5G aany k baad mobile makers b 2G kill kr dein gy apni products say so Pakistan mein 2G or 4G ka license lena lazmi ni rahy ga , ap dekh lein k 3 saal mein kitni changing ai ha or aany waly 3 saal mein kitni aa sakti ha

          • Faizan Ul Haq

            5G not gonna come to pakistan(even developed countris) by 2019 by any chance .

          • Zafar Abbas Rizvi

            5G 2019 myn USA and Korea Jesi contries myn roll out hona start hoga aur common 2023 tak ho ga jab us ke equipments sastay hon gay aur 2nd world contries b 5g ko roll out karna shuru karyn gi. Pakistan, India aur Bangladesh jesi countries myn 5g 2027 se pehle kisi soorat nai pohanch sakta. wake up fron dreams my dear

        • aamir7

          Depends on merged company’s needs.

      • BADAR

        Telenor k pass 2g k liye sub se kam frequency hai? Kiya isi liye sub se ghatiya network hai?

        • BADAR

          SMS arrival me bohat problem hai. aur 3G ka problem yeah hai k har baar data connection on krne se aik jaisi speed nhi deta. agar fastest speed chahiye to phir baar baar data connection on off krna hoga phir aye gi asal 3g speed.

          • Yasir Ali Raza

            Exactly ap ny sahi farmaya 4.8 ke wajjha say msg pay affect hota ha or 5mhz ke wajha say 3g speed pay

          • Yasir Ali Raza

            Or Merger hony k baad sub say ziada bad effect b telenor pay he parry ga , each and every aspect

            • BADAR

              Wo kaise parega?

  • Rizwan Yaqoob

    14.8MHz for 4G/LTE + Ericsson. Just Imagine!!

    • Muhammad Faheem

      Now I came to know the reason behind Warid supremacy in quality…. Huge spectrum, low subscribers base and state of the art equipment…..

    • AbdulB1

      While you need 40 Mhz to fully utilize LTE.

      • A full utilization is cost prohibitive. Even in established markets, like US, where Verizon and likes have compounded bands to give 40 Mhz in major cities the per GB cost exceeds $30, with caps being placed as low as 10 GB. The cost increases further for non-plan subscriptions.

        • AbdulB1

          no it is not about cost of maintaining equipment, it is mostly the licensing costs and catering the ever growing data consumption.

          • Exactly. Something that isn’t the most viable thing to do in Pakistan.

  • ahmed

    Only if they keep Ericsson and spare 1800MHz for LTE and just imagin what they can do in market and Zong & Telenor than have to think what they can do with ZTE (both are worst companies).

  • NSN

    Ericsson will rock with such a great Spectrum.Moblink/Warid now time to Rock with Ericsson

  • Fakhre Alam

    allocating 900Mhz for 4G will create serious problems for mobilink cuz most of the smarphones support 1800Mhz

  • ASif

    Lekin customers ko faida to ho internet pkgs to ab b bohut menge he

  • Curious

    This is what you are getting with 5Mhz refarmed by Warid for 4G LTE to cater 235,239 LTE customers currently in 30 cities. After merger, it will be 7,648,548 mobilinks 3G users willing to experience LTE. Considering Zong’s user statistics almost 10% are 4G users as compare to 3G. While we consider the fact that both mobilink & warid leads in corporate consumer base so there will be high demand of LTE along with 3G. Roughly almost 2 million mobilink users will be highly anticipating LTE. Hoping that the merged company keeps up with the legacy of warid of not compromising over quality. Is there any technology expert who can evaluate the facts that how can the merged spectrum be best utilized to cater maximum need with best quality? Also how will the cell site shit dowms will take place? Will they shift warid’s LTE hardware to mobilink’s cell Site? If yes then this activity will create service downtimes?

  • Ahmad

    Is there any update on the Employee’s Part? how they are gonna merge? what could be the settlement between two organizations?

  • Mohammad Kaab Baig

    can u plz tell the share price of the transaction ?