Pakistan Telecommunications Company (PTCL) has signed an agreement to acquire a 100% stake in Norwegian telecommunications company Telenor’s local unit, Telenor Pakistan.
PTCL, a subsidiary of UAE telecom giant e& with 23.4% ownership, is the largest integrated Information Communication Technology (ICT) company in Pakistan.
PTCL’s major assets include Ufone, a mobile operator in Pakistan with 25 million customers. Telenor Pakistan, which was launched 18 years ago, has 45 million customers, according to the company.
The acquisition will open up new opportunities, particularly in network infrastructure, broaden the customer base and accelerate investment in digital technologies, allowing us to move forward with our digital transformation at a faster pace.#eAndinternational #eAnd #PTCL— e& (@etisalatAnd) December 14, 2023
Telenor said that the transaction valued the operation at 5.3 billion Norwegian crowns ($493.5 million). However, PTCL claimed that the agreement was based on an enterprise value of PKR108 billion ($380 million) on a cash-free, debt-free basis.
Telenor concludes sale of Telenor Pakistan to PTCL
Telenow initially tried to do a merger in Pakistan but it didn’t work. The second-best alternative was to arrange a sale, according to a Reuters report.
“The sale is part of Telenor’s strategy to build scale and market-leading players in Asia … It concludes the strategic review of the telco operations in Pakistan, which was announced in July 2022,” the official statement said.
The transaction values Telenor Pakistan at NOK 5.3 billion ($308 million) on a cash-and-debt-free basis. This includes repayment of intercompany loans of NOK 3.5 billion and reduced interest-bearing liabilities of NOK 1.8 billion, including leases.
The agreement is subject to regulatory approvals and the transaction is expected to be completed during 2024.
“Our decision to pursue the sale of our Pakistan operations follows 18 successful years of operations in the country, which started as a greenfield rollout,” Telenor Group CEO Sigve Brekke said. Today, he said, Telenor Pakistan is a future-ready telco operator, with a strong distribution network and talented team serving 45 million customers.
“By selling to the country’s largest integrated ICT company, we believe this consolidation move would help strengthen Pakistan’s telecoms sector, creating opportunities in new areas of growth to the benefit of consumers in Pakistan,” he added.
Petter-Børre Furberg, Head of Telenor Asia, said that the company’s strategy in Asia is to “build number one positions in the markets we operate, with scale as a pre-requisite for value creation and profitable growth … Looking ahead, Telenor Asia will remain an active owner for the three market-leading businesses which make-up our Asian portfolio.” Telenor Pakistan will continue its business as usual and focus on delivering services to its 45 million customers.
PTCL says the acquisition will boost digital transformation
In a media release issued on December 14, PTCL, which is part of e& Group, said that it signed a share purchase agreement with Telenor to acquire a 100% stake in Telenor Pakistan based on an enterprise value of Rs 108 billion ($380 million) on a cash-free, debt-free basis.
PTCL said the investment brings together the strengths and expertise of both PTCL Group and Telenor Pakistan, creating synergies that will drive innovation, bolster the market, and accelerate the digital transformation journey in the country of 241 million people.
Hatem Bamatraf, President and Group CEO of PTCL & PTML said, that the company is confident that “the strategic synergies created by combining forces with Telenor Pakistan will result in enhanced value for our customers and stakeholders as they are the ultimate beneficiaries of this transaction.” He expressed hope that the combined entity “will serve as a best-in-class provider across all domains with better coverage, seamless data experience, massive reach and a wide range of products and services for customers.” The acquisition will also add to PTCL’s strategic growth and market expansion.
Hatem Dowidar, Group CEO of e&, called the strategic acquisition of Telenor Pakistan a significant opportunity for market consolidation, empowering PTCL to invest more in creating the best next-generation network in Pakistan.
“This move reinforces our commitment to the progress of the country’s telecom sector, delivering added value to our customers and shareholders” and helps in shaping a telecom legacy where innovation and connectivity merge to explore future opportunities.
PTCL said that it is actively working towards a smooth transition process to ensure minimal disruption for employees, customers, and other stakeholders. “This agreement will go a long way in ensuring that we provide our customers with the most efficient and technologically advanced solutions,” said Hassan Nasir Jamy, Chairman PTCL Board.
Will the Telenor Pakistan sale affect Telenor Microfinance Bank and Easypaisa operations?
The short answer is no. Telenor Microfinance Bank (TMB) and its financial platform, Easypaisa, have informed their customers that their operations remain unaffected. TMB and Easypaisa are not part of the recent transaction, and customers’ deposits are completely secure, the company said.
“Telenor Microfinance Bank (TMB) & Easypaisa is an independent financial institution, licensed and governed by the State Bank of Pakistan (SBP),” TMB said. TMB is a joint venture between Telenor B.V. (Telenor’s parent company) and Ant Group (Alibaba Group of China) and both are dedicated to transforming TMB from a microfinance bank to a digital retail bank, subject to regulatory approvals.