Zong Still Rallying For Warid, Hires Consultant Firm to Assist in Bidding

Zong_Warid

Zong, having denied the chances of buying Warid Telecom earlier this year, is now again running to bid for the Dhabi Group’s telecom arm in Pakistan for a speculated value of around USD 1 billion, we have confirmed with sources.

For the purpose, Zong has hired MAS ClearSight to evaluate the deal and assist the firm during the buyout process, told us the sources.

Zong, with around 22 million subscribers, is currently number four operator in Pakistan. If deal goes through successfully then by adding Warid’s 12 million subscribers will get Zong to second position in the market with 34 million subscribers, just 2 million short of Mobilink.

Confirming Zong’s intentions, Sikandar Naqi, Chief Public Relation Officer of Zong, confirmed ProPakistani that his group is seriously looking into Warid. “We already have been given a mandate to go forward with the bid and we are anxiously waiting to see how it turns out”, told Mr. Naqi in an email communication with ProPakistani.

Other than Zong, UAE based Etisalat and Russia’s VimpelCom – the parent group of Mobilink – are hot contenders for the Warid buyout.

China Mobile is reported to have over USD 70 billion cash in hand. Group is long trying to expand its international business in Pakistan and other regional markets.

Buying Warid can be a good idea for China Mobile, especially when new customer acquisitions have become harder, thanks to tighter regulatory measures for selling new SIMs and increased tele-density.

Conditions for new sales are going to get only harder after proposed implementation of Biometric verification system later this year.

In such situations, 12 million customers against USD 1 billion looks a lucrative deal when 3G is just round the corner to boost ARPUs by many folds.

Pakistani operators are set to divert their focus from voice to data after 3G deployments. With around 30 million internet users in the country, over half of them connect to the web via mobile phones through sluggish GPRS and EDGE services.

In a country like Pakistan, where internet reach is notably limited, a vast majority ends up with mobile internet as their only option for connecting to the internet. With tremendous amount of mobile phone penetration, the proposition for higher revenues through high-speed mobile internet is only going to get better after 3G.

Analysts are predicting cellular ARPUs to increase by 300 to 400 percent during post 3G era with hefty internet offerings along with primary voice services. Any operator with more customers during 2G networks means more revenues after getting 3G networks or if put in other words higher customer base means better chances of return on pre-3G customer acquisition investments.

However, Zong’s probable acquisition of Warid is going to increase company’s ARPU even before 3G. Along with a boost to ARPUs, the deal – if went successful – will bring good postpaid user base as well, which not has been Zong’s forte till now.

Not to mention, Warid Telecom is largely known for loyal customer base and strong network infrastructure, though with limited coverage.

Additionally, with the Warid buyout, Zong will become an LDI license holder – without investing extra for a fresh licence – something that Zong has been trying for years.

Tech reporter with over 10 years of experience, founder of ProPakistani.PK


  • test

    it not only 1 billion dollars but also about 900 million dollars liabilities of warid is part of deal so its almost 2 billion deal.

    • DJ

      Looks like some inside source is here :)

    • Raja Maja

      Tester Tu Cha gia hai ;)

      Under ki baat Tester ke sath………..lol

  • rehan

    when is the final auction?

  • Telecom Traveller

    I’m sorry but looks quite suspicious to me. Zong going to spend 1bn dollars to get a license that costs $500,000 (and a $10 million refundanble bank guarantee that expires in 3 years!!!).

    I’m not sure what Mr Naqi is smoking but he’s bad, bad news. He ruined PTCL and now he is doing same to Zong.

    • CMO

      – Mobile license costs $500k? Excellent. Great News.
      – Sikandar Naqi is a VP not a board member. So Warid Buyout can’t be his decision. Anyways, shabash for your very convincingly ridiculous information sharing.

      • Telecomistan

        Idiot I’m referring to LDI license (go to PTA website) before barking.
        Wireless telecom license for Warid is going to cost additional minimum $300 million dollars to renew because nearly this is up for Warid and Telenor.

        Shabash for not looking beyond the basic and going nuts on this forum.

  • a customer

    seems like the ‘silent warriors’ are in the game and when they are in, they thrash!!! look at how they have undercut the market and expanding like no one else

  • Amir Iqbal

    Like it, if Zong buy Warid.,,,
    which means BEST PACKAGES + BEST NETWORK

    • SachaBolta

      More like 2 weak companies merge, makes a bigger weaker company.

      • Amir Iqbal

        At this time Zong offers BEST PACKAGES with poor network
        while,
        WARID has BEST NETWORK but poor packages.
        imagine when these both combines than they have
        BEST PACKAGES + BEST NETWORK

        • SachBolta

          I’m thinking
          POOR NETWORK + POOR PACKAGES

          Don’t underestimate the power of Zong to screw up Warid also.

        • Hummad Haider

          There’s one simple formula for all:::

          Best Network==> European vendor(Erricsson)
          Poor Packages==>Expensive service provider(erricsson)

          Weak network==> Chinese vendor(ZTE)
          Best Packages==> Cheap service provide(ZTE)

          • Amir Iqbal

            Hummad you are right.

            But till now it is just supposition because there are more players also!!
            SO wait and watch who win!!!!!!!!!!

  • SRK

    pls make research after giving such posts.
    Warid is already bought by Etisalat group and in Ufone we are already making plans to combine both.
    Idiots

    • zee

      Hahahaha traffic reply SRK

      • Sharjeel

        SRK, go back to school and do some research before you post

  • CMO

    Zong will become an LDI license holder by buying Warid? Like VimpelCom became a tobacco manufacturing licensee in Mobilink deal. Good research. Shabash.

  • Bonga

    Nobody ever mentioned a $1 Billion buyout figure, so not sure where it came from. May be ProPakistani just wanted to spice up the news. At any rate, Warid has a negative equity and this buyout will not happen till Abu Dhabi Group accepts a much lower ~ $150-250 million offer, which it won’t. Lastly, 300-400% ARPU increase via 3G services will also not happen. It didn’t work in India and it won’t work in Pakistan either. Operators do not have any disruptive data-enhancing 3G business models in this part of the world and this is why they are insisting on a lower 3G license fee. With PKR projected to hit 127 to 1$, real ARPUs will actually decrease.

  • USD 70 billion Cash in Hand … China a gya China cha gya .. :P

  • The customer

    Warid Telecom still owe a lot of money and have many court proceedings from poor companies that trusted to work with them. I am one of those guys that suffered and I am sure one day the unethical people in Warid also suffer like me and my family. CROOKS……. And the lawyers that defend them are no worse.

  • The customer

    Whoever buys them out have a lot of court proceedings as a bonus