PTCL Group has shown its interest in acquiring Telenor Pakistan’s operations and management in totality, well-placed sources have confirmed.
If sources are to be believed, a stock filing is likely to be made today or tomorrow at most in this regard, where PTCL will be intimating to its shareholders about the group’s intent in acquiring Telenor.
Update
PTCL has notified the Pakistan Stock Exchange to show intent of acquiring a telecom company, but didn’t specify the name of the operator.
The stock filing said that PTCL board of directors authorised the company to explore investment opportunities in the telecom sector of Pakistan.
Sigve Brekke, the Chief Executive Officer (CEO) of Telenor International said in November 2022 that the group is looking for “merger opportunities” in Pakistan.
The move will be part of a strategic shift in Telenor’s focus from Asia to European markets.
Telenor Group, which operates telecom businesses in nine markets across Europe and Asia, is now shifting its focus to European markets as it recently merged its operations in Thailand.
A similar pattern could be followed in Pakistan where PTCL might merge Telenor with Ufone, the cellular arm of the PTCL group.
Telenor Group previously wrapped up its operations in India, Myanmar and Indonesia as well.
While more details on the development are yet to surface, through highly placed sources, ProPakistani can confirm that both parties are in advance talks and an announcement could be made soon.
We can also confirm that a delegation of high-level PTCL officials was seen at 345 headquarters in Islamabad.
Telenor had long been planning (read urging) to exit the Pakistani market, and in fact, several attempts were made with inconclusive negotiations.
As per sources, the previous attempt went undecided due to the price tag of the deal. This time, however, it seems that things have advanced to a stage where both parties have made compromises to settle the bargain, at around $700 million.
If things go as planned for PTCL, the acquisition could result in the merger of Ufone and Telenor Pakistan with 72 million mobile customers, almost equaling Jazz’s long-standing leadership position with almost 74 million customers.
It may be recalled that Ufone lost its 2nd position in terms of cellular subscribers to Telenor in 2008, and was never able to catch up again.
Ufone’s recent past has been aggressive in nature, particularly the way e& (previously Etisalat) is planning to position itself in the regional market.
Last’s year’s spectrum acquisition for Ufone was also considered as a bold move by the operator, given the deteriorating ARPUs, economic crunch and political instability in the country.
From the looks, it is apparent that PTCL group, with strong backing from e&, is now looking to strengthen its position in Pakistan’s telecom industry.
Here’s a brief look at a couple of stats after the proposed merger:
| Ufone Current Numbers | Post Merger Ufone Numbers | |
| Customers | 23.51 Million | 72.04 Million |
| Spectrum | 27.6 MHz | 56.2 MHz |
Not to mention, Jazz has currently 47.2 MHz in various bands of spectrum for its 74 million customers, while Zong has 33.6 MHz of spectrum for its 45 million customers, leaving the merged Ufone/Telenor as the most spectrum-rich operator in the industry.
Some Background
For the last several years, both Ufone and Telenor were struggling pieces of Pakistan’s telecom industry.
Ufone had missed the train, mainly due to its late entry in 4G and then lack of investments (for network upgradations) during 2015-2020, leaving the operator to struggle at the number last position in the market.
Telenor, on the other hand, lost traction – well mainly due to Group’s lost interest in Asian markets. Telenor, as you may suggest after seeing its financial reports, had been struggling for the past several quarters.
Things only worsened for both Ufone and Telenor with Zong and Jazz stably rocking the boat at a pace that was not possible for Ufone and Telenor to catch.
With this proposed merger, Ufone could get a massive 45 million customers, which is otherwise not possible for Ufone considering that the market has matured and customer acquisition cost is either very high or not possible at all.
