Emirati firm may buy Telenor Pakistan
Karachi: ownership of Telenor which is the second largest cellular service provider may be acquired by Emirati firms . This is due to increasing cost and shrinking prospects of business in the country.
News is making rounds that Telenor Pakistan is in in talks with an Emirati-based multinational telecom firm to sell its operations. Therefore, the Emirati firm may buy Telenor Pakistan.
However, Telenor’s spokesperson has refused to pass any comment on the developments.
An insider reported that talks between the Emirati firm and Telenor Pakistan have reached an “advanced stage.”
A source from Ministry of IT has also confirmed that a deal in underway between Emirati firm and Telenor Pakistan. However, the sources refused to share any other information about the development.
“The Emirati Company has a sizable presence in Pakistan, in nearly all key areas of the telecom sector. Moreover, it is interested in further consolidating its position,” the source said.
The key reason behind the sale is the growing cost of doing business in Pakistan. The company suffered huge losses due to the steep depreciation of rupee value.
The company’s operational cost skyrocketed to $55 million mainly due to skyrocketing electricity prices. The company paid $17 million alone in power bills.
Therefore, in such circumstances it seems appropriate for the Telenor Pakistan to shut its business in Pakistan. It is more logical to expand it in a region where the profits and business prospects are higher.
According to the reports, the company has demanded price between $1 billion and $1.2 billion. However, the Emirati firm seems to be offering not more than $780-910 million.
The business environment for the telecom sector in general has become quite tough. Therefore, the government needs to work to revive the industry.
An international consultant on telecom policy and regulation, Parvez Iftikhar said: “Things have not been good for around two years now, but the recent appreciation of the US dollar had made things even more challenging.”
