Maskatiya Communications (Pvt) Limited (MAXCOM) has transferred its assets of Rs 68 million recently to Pakistan Telecommunication Company Limited (PTCL) along with subscribers as part of agreed acquisition deal signed last year, official sources said.
MAXCOM had been acquired by PTCL as an 100% owned subsidiary last year with the management control however its asset had been gradually transferred to PTCL, which concluded recently.
"The net assets of MAXCOM have been transferred to PTCL at a book value amounting to Rs 68,382 thousand and the balance amount of the investment of Rs 6,144 thousand has been expensed," official sources said.
MAXCOM, a broadband internet service provider in the cities of Karachi and Hyderabad and as such having less than 1% market share in Pakistan, was acquired in 2010 by PTCL – the largest broadband service provider of Pakistan through purchase of 100% shareholding of MAXCOM.
Subsequent to the acquisition, it was decided by PTCL as well as MAXCOM to merge operations of both the entities in order to offer better and bundled services of voice, data and IPTV to MAXCOM customers on the same basis as are being offered to PTCL’s customers.
Having a subsidiary i.e. MAXCOM that operates as a separate business entity offering broadband services only, would not only result in competition between PTCL and its internet subsidiary and, as such, duplication of CAPEX and OPEX for the PTCL group, but would also cause confusion and duplication for its customers as the parent Company would be offering same services (and many more) that the subsidiary is offering on standalone basis.
With the liquidation of MAXCOM and transfer of its net assets to PTCL, the MAXCOM customers, employees and infrastructure stand duly integrated in PTCL thus MAXCOM ceasing to act as an independent subsidiary of PTCL.
MAXCOM management also felt that market demand for convergence of Internet with voice and video has resulted in non-viability of the standalone ISP and internet business in Pakistan but MAXCOM, which only has the internet and data license and operates as an Internet and ISP business, would therefore have a non-viable future as a separate business entity.
The technical integration will provide PTCL with the opportunity to gain from said experience of MAXCOM thus helping to improve overall customer care of PTCL as MAXCOM possess high skilled customer care service through the dedicated human resource trained in this respect.
Analysts said that the integration will bring value addition for PTCL group in terms of savings in CAPEX and OPEX as well as improved customer care.