Thanks to our friends at Phone World Magazine, market is abuzz with rumors of merger / acquisition between Mobilink and Warid and we have been asked by some of our readers about the situation.
We think that news has nothing in it to meet our reporting criteria and hence below is more like a commentary and some information that may clear our readers about the whole situation.
Warid’s marriage with other operators has long been discussed. Few substantial efforts were also made but things didn’t turn positive. Telenor, Mobilink, Zong, PTCL and Ufone have all tried to acquire Warid at different times but they couldn’t close deal with Dhabi Group, the sole and cent percent owner of Warid Telecom.
We have heard several times of negotiations between Warid and other telecom groups, couple of them reaching at very advance stage, but all deals fell apart due to one reason or the other. Mainly due to price that was offered to Dhabi Group.
So, given the track record and as an industry expert wanted to put it, you just can’t say anything regarding Warid with certainty until a sale purchase agreement is signed and announced officially.
Currently, our sources close to top management of Mobilink tell that there’s nothing like what has been in the rumors. Even the decision for showing intent hasn’t been taken, which means due diligence process hasn’t started and Mobilink is almost no-where in acquiring Warid.
There’s nothing one can say with surety about the future but what we are certain about is that there are no on-going talks between Mobilink and Warid as of today
A high-level source in Mobilink, who often interacts with VimpelCom on various matters, confirmed me that there is no go-ahead from VimpelCom (parent group of Mobilink) at all we can’t have it before mid-September.
“If there’s anything about Warid-Mobilink deal, it could be nothing more than an intent at Mobilink headquarters that may translate into a proposal which will take at least 45 days for a go-ahead from VimpelCom”, said our source who works with Mobilink.
Talking of intents, several other operators have it and we are just not sure about the outcome of Mobilink’s as of yet.
We believe that the deal, if gets through, will be good for both operators. Moblink will be able to increase its lead with Telenor, and it will have 4G network deployed even before they purchase a license that they are considering to acquire during next auction.
Not to mention, this amount of lead and several million customers are not possible to attain through conventional means, all thanks to mandatory biometric verification system in place, increased competition, capex on network expansion and growing tele-density.
With the deal, Mobilink can get a lot of customers with almost same marketing and sales cost that they will have to spend otherwise (without acquiring Warid) to eventually gain a lot lesser number of customers. So getting Warid on-board will be a plus for Mobilink. On top of this, they will get quality, loyal and high-ARPU customers, that are naturally going to help Mobilink recover its balance sheets that are little jolted these days.
While considering the positive sides, we are also little skeptical about VimpelCom’s spending muscle. They are struggling lately in finances and otherwise too, all thanks to its relationship with Telenor (part owner of VimpelCom) due to some scandals and the legal battle they have been fighting in few markets.
Warid’s debts are also a concern and it will be extremely hard for any operator to close the deal with contentment for both parties. But this one point can turn into bone of contention between both the groups.
For Warid, if deals go through, this can be the the happy ending that are wishing for a long now. Warid, after years of uncertainty, will be able to pick up the real strength it has got: quality network and loyal customers.
P.S. Warid and Mobilink management have lately met for some other one of its kind project that they are planning to do together. We will tell you of it when its through. Its altogether a different thing from merger / acquisition but chances are that someone misread the meetings.
But yes, there is also a chance that management meetings for a different agenda might end up with acquisition talks, who knows?
As we said above, there’s nothing one can say with surety about the future but what we are certain about is that there are no on-going talks between Mobilink and Warid for an acquisition as of today.