The Pakistan Telecommunication Authority (PTA) has proposed tougher competition rules for telecom operators found to hold Significant Market Power (SMP), expanding both the criteria used to assess market dominance and the regulatory obligations that may follow.
The proposed changes form part of the Ministry of Information Technology and Telecommunication’s Competition Rules 2026 and are intended to give the regulator a broader framework for assessing how much influence a telecom operator holds in a relevant market.
Under the proposed amendment, a licensee may be presumed to have significant market power if its share exceeds 25 percent of the relevant telecommunications market.
However, PTA would not rely on market share alone. Instead, the regulator may examine a wider set of market, financial, and competitive factors before reaching a final determination.
Broader Test for Significant Market Power
The proposed framework would allow PTA to consider market share based on sectoral revenues, overall market concentration, control over essential infrastructure, spectrum holdings, economies of scale, vertical integration, and barriers faced by new or expanding competitors.
Other factors may include an operator’s financial and technical resources, access to subscribers and distribution channels, network effects, buyer power, demand elasticity, excess profitability, and competition on non-price factors.
PTA may also consider the possibility of coordinated behavior between operators where relevant to competition in the market.
The broader approach means that crossing the 25 percent threshold would not automatically determine an operator’s status. Instead, the Authority would assess the overall structure and competitive conditions of the relevant market.
Additional Obligations for SMP Operators
Telecom operators determined to possess Significant Market Power could face a wider range of regulatory requirements.
These may include controls relating to tariffs and pricing, non-discrimination, transparency, interconnection and access services, reference offers, infrastructure access, accounting separation, and cost accounting.
Operators may also be required to provide fair and reasonable access to essential facilities where such infrastructure is considered critical for effective competition.
The proposed rules would further allow PTA to conduct periodic market reviews and revise an operator’s SMP status where competitive conditions, market structure, or technology change.
The amendment is designed to strengthen competition oversight in Pakistan’s telecom sector by moving beyond a simple market-share test and allowing the regulator to apply remedies based on a broader assessment of market influence.
If adopted, the Competition Rules 2026 could result in closer regulatory scrutiny for operators with substantial market presence while giving PTA greater flexibility to respond to changes in the telecom market.
