Pakistan Telecommunication Authority (PTA) has linked a numbers of stringent conditions to acquisition of Telenor Pakistan (private) limited and Orion towers (private) limited by Pakistan Telecommunication Company Limited (PTCL).
PTA’s order, a copy of which is available with Business Recorder, revealed that the Authority has evaluated the proposed transaction and the same is considered in line with the applicable legal and regulatory framework.
However, the Authority is of the view that it would be appropriate to impose certain safeguards to protect the rights of consumers and other licensees as well as address concerns expressed by stakeholders.
PTA grants conditional nod as PTCL accepts terms for Telenor Pakistan acquisition
The order of the Authority herein also encompasses the presumption that consequent upon completion of the acquisition process, PTML and TP (herein after collectively refered as “MergeCo”) shall subsequently initiate the process of amalgamation, subject to fulfilment of requisite regulatory requirements of the Authority.
It is anticipated that PTML will be the surviving entity.
However, accordingly, the conditions contained in para 13 below shall also be applicable on P TML and MergeCo, where applicable.
In view of the above, following are the conditions in relation to the proposed transaction:
The Notifying Patties and PTML/ MergeCo shall continue to establish, maintain and operate the Licensed Systems and provide the Licensed Services in compliance with the license conditions and applicable legal framework in Pakistan, AJ&K and GB.
The Notifying Parties and PTML shall continue to operate as separate legal entities, till the decision on the application for amalgamation of TP and PTML by the Authority and as per applicable law.
Till the conclusion of the amalgamation between PTML and TP, both licensees will adhere to the respective terms and conditions of each license and shall individually be responsible for compliance of their respective license terms and conditions.
PTCL shall unconditionally accept and own all the liabilities and obligations with respect to compliance of terms and conditions of all respective licenses granted to TP, TLDI and OT as mentioned in para I .4 (a), (b) and (c) respectively of this order.
TP, TLDI and OT shall provide duly certified copies of updated Form – 9, Form – 7 and Form – A, issued by SECP/Registrar of companies in Pakistan, AJ&K and GB, respectively within thirty (30) days from the date of issuance of No Objection Certificate (NOC) by the Authority.
The Notifying Parties and PTML/MergeCo individually and collectively shall not introduce or modify brand names without prior written approval of the Authority. In this regard, at least thirty (30) days prior application be submitted to the Authority.
The NOC shall be subject to clearance of all outstanding regulatory dues (with the exception of any restraining order from the Court).
The Notifying Parties and PTML/MergeCo shall adopt a fair and transparent competitive process for all telecom related arrangements/agreements with the licensees on non-discriminatory basis;
The Notifying Parties and PTML/MergeCo shall ensure non-discriminatory, transparent and fair access to its infrastructure and bandwidth provisioning to all telecom licensees.
PTCL shall not enter into agreements, directly or indirectly, having the effect of imposing exclusive deals or resale restrictions which otherwise prevent other licensees from procuring bandwidth from PTCL and offering services to their own customers.
The Notifying Parties and PTML/MergeCo where applicable, shall not enter into any arrangements for acquiring telecom related services unless such transactions are conducted at arm’s length basis.
The Notifying Parties and PTML/ MergeCo shall be obligated to provide any information as and when required by the Authority.
Accounting Separation
a. The Notifying Parties and PTML/ MergeCo shall maintain separate accounts for all business units as required by the Authority;
b. The Notifying Parties and PTML/ MergeCo shall submit separate accounts to the Authority on annual basis, sufficiently detailed to the satisfaction of the Authority.
Interconnection
a. The Notifying Parties and PTML/ MergeCo shall comply with the Interconnection Guidelines, 2004 and any direction(s) of the Authority from time to time;
b. PTCL, TP, TLDI and PTML/ MergeCo shall not discriminate among the licensees as to the terms of interconnection including international termination,
c. PTCL, TP, TLDI and PTML / MergeCo shall submit all RIO(s) to the Authority for approval within three (03) months from the date of issuance of NOC and subsequent amalgamation, respective y;
d. Any modification in existing interconnection agreement(s) signed by PTCL, TP, TLDI and P TML/ MergeCo shall be subject to prior approval of the Authority;
e. PTCL, TP, TLDI and P TML/ MergeCo shall subject to available capacity, ensure non-discriminatory and fair access to interconnection capacity for all telecom licenses;
f. PTCL, TP, TLDI and PTML/ MergeC0 shall offer interconnection capacities on similar terms, to all other licensees, as offered to its affiliates/subsidiaries;
g. PTCL, TP, TLDI and PTML/ MergeCo shall not reduce interconnection capacity allocated to other telecom licensees without prior approval of the Authority. Interconnect capacities and or their pricing shall not be used in a manner to impede or restrict other operators’ access to the customers of the PTCL, TP, PTML/ MergeCo;
h. Interconnection agreements between TP and other licensees will stand transferred to PTML/ MergeCo, pursuant to the amalgamation;
i. PTCL, TP, TLDI, PTML/ MergeCo shall provide interconnection and related services and facilities on the basis of unbundled network elements and charge accordingly;
j. PTCL and MergeCo shall submit complete details of co-location services/ exchanges and its occupancy/ availability for other operators on bi-annual basis. No preferential treatment shall be given by PTCL and MergeCo to its affiliates/ subsidiaries for its colocation services/ exchanges;
k. PTCL shall not engage in any conduct that constitutes an unfair or unreasonable impediment to access infrastructure or bandwidth resale that limits the commercial operations of competing licensees.
Tariffs
a. PTCL, TP, TLDI and PTML/ MergeC0 shall ensure that tariffs shall not be predatory, unfair or burdensome for all licensed services;
b. PTCL, TP, TLDI, and PTML/ MergeCo shall not introduce/ levy/ impose/ offer/ change any tariffs for wholesale and retail services including but not limited to LL, LDI, CMO, Retail Broadband, Broadband Access, IP Bandwidth, Interconnection including Co-location, DPLL, IPLL, Call Transit, Wholesale Call Termination without prior approval of the Authority. In this regard, PTCL, TP, TLDI, and PTML/ MergeCo shall furnish existing tariff in the manner as and when required by the Authority.
Prohibition of Cross-Subsidization
a. The Notifying Parties and PTML/ MergeCo shall maintain transparent pricing stmcture for their wholesale and retail services to prohibit cross-subsidization;
b. PTCL shall not cross-subsidize its retail or downstream services through revenues derived from its upstream services, or otherwise offer unreasonably low or predatory prices in any market with the intent or effect of foreclosing competition.
Retention of Existing Contract Tenure
a. The Notifying Parties and PTML/ MergeCo shall not terminate any of the existing telecom related contracts with other telecom licensees (excluding arrangements as provided in para 13.19 b of this Order), for the remaining period of the contract or three (3) years or upon expiry of contracts whichever is earlier, from the date of issuance of NOC, unless mutually agreed between the licensees;
b. The Notifying Parties and PTML,/MergeCo shall ensure to contlnue IRU arrangements with other telecom licensees for at least a period of five (5) years or upon expiry of arrangement, whichever is earlier. However, considering the importance of essential requirements for connectivity and availability of telecommunication services across the country, the existing IRU arrangements shall not be terminated without plausible legal justification. Early termination of the IRU arrangements shall be subject to mutual agreement.
Consumer Protection
a. PTCL, TP, PTML/ MergeCo shall ensure that latest telecom services/ modern technologies are also provided to its consumers;
b. The Notifying Parties and PTML/ MergeCo will ensure protection of consumer rights;
c. The Notifying Parties and PTML/ MergeCo shall submit Code of Commercial Practice (CCP) and Standard Contract of Service (SCOS) for approval of the Authority afresh within ninety (90) days from the date of issuance of NOC and subsequent amalgamation, respectively.
Technical Aspects
a. The Notifying Parties and PTML shall not merge their networks, share spectrum and decommission any sites in Pakistan, AJ&K and GB, without prior approval of the Authority.
b. Decommissioning/ Dismantling of BTS Sites Rendered Surplus
1. The Authority may restrict decommissioning/ dismantling of BTS Sites consequent to amalgamation of TP and PTML;
2. All BTS sites of PTML and TP shall continue to remain operational and will not be decommissioned / dismantled for amtnimum of four (04) months’ period from the date of the Authority’s approval of such decommissioning/ dismantling request;
3. The MergeCo shall give first right to guest(s) licensee to acquire BTS Site/ Tower. In case, the guest licensee refuses to acquire the BTS Site/ Tower, the MergeCo, subject to fulfilment of all legal requirements may transfer tower to other telecom licensees including Tower/lnfrastructure licensees in order to avoid possible dismantling. In case, the MergeCo and the guest licensee are unable to resolve the issue they shall approach the Authority and the decision of the Authority shall be binding;
4. PTCL/ P TML/ TP/ MergeCo shall share detailed access, transmission, core network integration plan sixteen (16) weeks in advance to the Authority;
5. The Authority, after analyzing the request on site-by-site basis, if needed shall direct MergeCo to retain a minimum number of sites to ensure existing coverage remains uninterrupted. The same shall be implemented in stnct compliance and in accordance with the Authority’s approval;
6. MergeCo shall maintain the aggregate FTTS percentage which is existing in independent networks at the time of acquisition ofTP•
7. MergeCo shall ensure uninterrupted service with required QoS to all consumers during the process of and subsequent to decommissioning/ dismantling of BTS sites. Decommissioning/ dismantling of BTS sites shall not reduce the premerger capacity and coverage areas of the services by PTML and TP both;
8. TP and PTML/ MergeCo shall provide updated coverage maps (before and after amalgamation) as and when required by the Authority and the same shall also be made available on their respective website,
9 .MergeCo shall ensure that record of all decommissioned/ dismantled BTS sites and backhaul links is updated with the Authority and FAB. Revised site database will be updated and reconciled with the Authority and FAB;
Decommissioning/ dismantling plan shall not include and impact any USF Co projects;
1 1) Voice only sites to be upgraded for provisioning of Mobile Broadband Services on priority.
c. Radio Spectrum
l) MergeCo to ensure efficient utilization of access spectrum and microwave backhaul spectrum after the amalgamation and return unused/ underutilized microwave spectrum as determined by F AB;
MergeCo shall reasonably re-adjust / re-arrange spectlllm assignments as and when required by the Authority in consultation with FAB and MolT&T, on industry wide basis, in accordance with applicable legal framework;
PTML/ TP or MergeCo shall participate in upcoming spectrum award to ensure coverage enhancement and resolve capacity issues at par with other operators and international best practices.
Quality of Service (QoS)
I) TP and PTML / MergeCo shall meet or exceed the prevailing QoS standards/KPIs being availed by the consumers. MergeCo will fully comply with any enhanced QoS standard as well as any other standards or indicators prescribed by the Authority or through regulations from time to time;
All QoS tools as already provided to the Authority by TP and PTML shall be supported for necessary upgrades. Any changes in agreements and SLAs with the vendor shall be communicated to the Authority beforehand;
TP, PTML/ MergeCo shall ensure online access of OSS KPIs to the Authority, facilitating real-time network monitoring and fault rectification and facilitation of online survey mechanism.
National Destination Codes and Numbering Series
In case MergeCo opts not to renew any of the cellular mobile licenses (either in Pakistan or AJ&K and GB) of existing entities (i.e. PTML, TP), MergeCo shall be required to make the following payment (s):
a. For Pakistan, Allocation Fees for NDC (034 or 033) = US$ 5 million (or equivalent Pak Rupees). This will be upfront payment and will be charged once;
b. For AJ&K and GB, Allocation Fees for NDC (034 or 033) = USS 0.5 million (or equivalent Pak Rupees). This will be upfront payment and will be charged once;
c. Annual Number Fees of MSISDN will be as per the provisions of Numbering Allocation & Administration Regulations, 2018.
Renewal of Licenses
The renewal process shall be initiated by the Notifying Parties and PTML/ MergeCo as per the terms and conditions of the licenses, the Rules, the Regulations, the Act, Policy Directives of the Federal Government at the relevant time.
Terms and Conditions of License(s) of Pakistan, AJ&K and GB
a. Relevant licenses of Notifying Parties and P TML/ MergeCo shall be amended and harmonized with other most recently issued licenses of same category. Further, requisite amendments to be incorporated in PTCL’s Integrated License is attached as Annex-A; of 33
b. Subject to the conditions contained in this Order, the terms and conditions of the respective licenses shall be complied with in true letter and spirit.
National Roaming Obligations
The MergeCo shall be obliged to permit mobile operators to roam on MergeCo’s network on mutually agreed commercial terms All pre-merger National Roaming arrangements shall continue to apply,
The Notifying Parties and PTML/’ MergeCo, where applicable, shall submit a compliance report to the Authority on a quarterly basis, demonstrating adherence to the conditions stipulated in this Order;
If any information given or documents submitted by Notifying Parties and P TML/ MergeCo are found to be incomplete, incorrect or misleading at a later stage and such information or documents have impact on the proposed transaction, legal action shall be initiated;
In relation to the amalgamation of TP and PTML, the conditions provided in this Order have been set forth for compliance by MergeCo. The Authority may review / impose additional conditions while deciding the application of amalgamation. Hence, all conditions related to amalgamation of TP and PTML are not exhaustive/concluswe at this stage.
