The Norwegian telecom operator Telenor Group is exploring “merger opportunities” in Pakistan, as stated by its Chief Executive Officer (CEO), Sigve Brekke.
Brekke told Reuters that the Telenor Group, which operates telecom businesses in nine markets across Europe and Asia, is looking for merger opportunities in Asia, including in Pakistan and on a regional basis.
The development comes after CEO Telenor Group announced a plan to merge the company’s telecommunication unit in Thailand with a local firm in a deal worth $8.6 billion.
According to ProPakistani’s sources, Telenor could potentially merge with Ufone or SCO because the Competition Commission of Pakistan (CCP) will not allow Jazz and Telenor to merge primarily because of the antitrust reasons.
On the other hand, Zong will not merge with Telenor because it does not believe in buying customers. This has happened before and the company has decided to grow instead of acquiring Warid and its customers.
SCO, which has been looking to enter the Pakistani market for a long time, appears to be a strong contender. As long as it is okayed by the government and has the availability of cash flows, it would not want to miss the opportunity.
Ufone/Telenor makes perfect sense — considering the recent changes as the PTCL group and its intent to grow (based on how it grabbed the recent spectrum), and it seems like it would want to at least evaluate the deal, if not close it.
Telenor’s intent to exit Asian markets was quite visible for the last few quarters, but it’s only now that they have gone on the record about it. Their exit from Myanmar, Thailand, Indonesia only hinted they could call it a day in Pakistan and Bangladesh too.
This shift in focus is mainly due to mounting operating costs, low ARPUs, and the incessant instability in the region.
Irfan Wahab Khan, CEO Telenor Pakistan told ProPakistani,
Telenor has been empowering the people of Pakistan over 16 years and has contributed immensely to the growth of telecom and digital infrastructure in the country. The telecom industry is fast evolving and there is a greater need to achieve scale in order to transform and invest in future technologies to create greater value for customers. The future is digital and as the industry evolves, we will continue to explore and assess structural possibilities where it makes sense in order to keep serving our customers better.
Telenor’s books clearly reveal that its European operations are more lucrative, which led it to make the decision.
No operator makes better sense in Asian countries unless it is indigenous in nature or if it has vested political or economic motives.
Although Telenor’s position in Pakistan is solid and warrants a good bargain, the deteriorating and unstable currency, market dynamics, and increasing pressure from competitors may affect its evaluation, and is probably why its exit from Pakistan is being prolonged.