Ufone and Telenor seek PTA approval to rebrand merged telecom company

ISLAMABAD: The management of Ufone and Telenor Pakistan has moved to rebrand their combined telecom business and has submitted an application to the Pakistan Telecommunication Authority for that purpose.

Earlier this month, Telenor Pakistan was formally merged into Pak Telecom Mobile Limited, the legal entity behind Ufone, after the Islamabad High Court granted final approval to the amalgamation. The proposed new name for the merged company is e&, reflecting the branding of UAE state-owned telecom operator Etisalat.

PTA sought SECP notification

PTCL had already written to the telecom regulator to seek approval for the new brand name. In response, the PTA asked for a notification from the Securities and Exchange Commission of Pakistan regarding the directors of the merged entity. The regulator also gave the same response to a separate communication from PTML on registration of the proposed brand, saying an SECP notification was necessary.

An official at the Ministry of Information Technology and Telecommunications said Ufone is a brand of PTML and, since Telenor Pakistan has now been merged into that company, there could be changes in PTML’s board. The official said the SECP would therefore need to issue a notification confirming whether the board composition had changed or remained the same.

A letter seen by the source publication showed that the PTA told PTML it could not launch or advertise any new brand before the required SECP notification was issued.

Merger structure and ownership

PTCL has been bifurcated in line with the Competition Commission of Pakistan’s decision on the merger of Telenor Pakistan into PTCL. Under that arrangement, PTCL and its other subsidiaries were separated from the mobile telecommunications business.

The government owns around 62 per cent of PTCL, while Etisalat holds 26pc shares along with management control. The remaining 12pc shares are held by private investors through the Pakistan Stock Exchange. Etisalat has recently rebranded itself as e&.

Legal concerns raised over proposed name

A senior Ministry of IT official, however, said that using the e& brand name for the merged Ufone-Telenor company could invite legal complications because the business would remain a subsidiary of PTML.

The official said PTML is itself a subsidiary of PTCL, which is a state-owned enterprise, and not directly under Etisalat.

"PTML is a subsidiary of PTCL — a state-owned enterprise — and PTML is not under Etisalat"

The same official said this could, in legal terms, raise the question of copyright infringement involving an international brand, unless the merged operator pays a royalty fee to Etisalat. He further said PTCL was already passing on profits to the UAE-based company even though the PTCL group had been posting losses for a prolonged period.