Telenor Pakistan, the country’s second-largest telecom operator, is dealing with an Emirati firm to sell its operations. A Norway-based cellular service provider looks to exit the country due to growing business costs. However, the telecom company has declined to answer any comment on this progress.
The potential buyer is aiming to buy Pakistan’s 2nd largest telecom provider for just $1bn. The Emirati firm already has a strong presence in Pakistan. However, the talks between companies have reached an “advanced stage.”
A source from the IT industry also confirmed the news that a deal was in progress. Besides, he declined to share any further information on this matter.
According to Bloomberg, in November, the Norway-based telecom company engaged Citigroup’s services to carry out the bidding process.
But the Norwegian has enlisted not one but two renowned multinational banks to execute the sale, according to an industry source.
The company has set an asking price between $1 billion and $1.2 billion. On the other hand, the interested party is looking to spend $780-910 million on the purchase.
The key reason behind the sale was the increasing cost of doing business. The company had started suffering losses due to the swift appreciation of the US Dollar.
Moreover, the company`s running cost has touched $55 million. In contrast, electricity prices consume a massive chunk of this. In this outgoing financial year, the company has paid almost $17 million in electricity bills alone.
Experts agree that the business environment for cellular operators has become challenging. The government and its regulatory authorities need to revive the industry, which has declined gradually since 2020.
Parvez Iftikhar, an international telecom policy and regulations consultant, said, “Things have not been good for around two years now. However, the recent appreciation of the US dollar has made things even more challenging.”
According to Mr Iftikhar, Pakistan has one of the world’s lowest average revenue per user. This shows that cellular services cost less here in comparison to other countries.
Federal Minister for Information Technology and Telecom Syed Aminul Haque accepted that the business environment for cellular operators is very challenging due to an overall economic squeeze.
“We at the ministry are trying our best to facilitate cellular companies. Including all other players in the IT and Telecom sector,” he added.
According to the latest figures by PTA, Pakistan currently has around 194 million cellular subscribers.
