December 14, 2023
In a significant move reshaping Pakistan’s telecommunications landscape, Pakistan Telecommunication Company Limited (PTCL) has announced a definitive agreement to acquire 100% ownership of Telenor Pakistan for Rs108 billion (approximately $385 million). This deal marks a historic consolidation in the telecom sector.
PTCL informed the Pakistan Stock Exchange of this development on Thursday, thereby clarifying speculations about the future of Telenor Pakistan, which had been a subject of much discussion over the past months.
Strategic Move in Telecom Sector
The Share Purchase Agreement (SPA), as confirmed by PTCL, will see the transfer of all Telenor Pakistan shares to PTCL. This acquisition is based on an Enterprise Value of Rs108 billion, negotiated on a cash-free, debt-free basis.
PTCL’s notice stated, “In accordance with the approval from the Board of Directors, PTCL has finalized the SPA for acquiring Telenor Pakistan, aligning with our strategic vision for the telecom sector.”
Financing and Market Impact
The acquisition is set to be financed through external debt, as per PTCL’s announcement. Following the news, PTCL’s share price surged to its upper limit on Thursday, with a notable trading volume of over 1.76 million shares, priced at Rs13.01 at the time of reporting.
About Telenor Pakistan
Telenor Pakistan, a leading mobile operator, serves around 45 million subscribers and reported a revenue of Rs112 billion in the last twelve months ending September 2023. The acquisition is a strategic move by PTCL, which already owns Ufone, another key player in Pakistan’s mobile telecommunications market.
PTCL’s Vision Post-Acquisition
PTCL envisions this acquisition as a step towards in-market consolidation, which is expected to enhance the long-term outlook of the telecom sector. “This transaction will improve the capabilities of the combined entities, leading to better service coverage and quality, and will support the economic growth of Pakistan,” PTCL stated.
The consolidation will position PTCL Group as a dominant player in mobile, fixed-line, and micro-financing services, serving over 70 million customers post-acquisition.
Telenor Group’s Perspective
Telenor Group, in its statement, valued Telenor Pakistan at NOK 5.3 billion on a cash-and-debt-free basis. Sigve Brekke, CEO of Telenor Group, expressed that the decision to sell their Pakistan operations is part of their 18-year successful journey in the country. “This consolidation will strengthen the telecom sector in Pakistan, opening new growth avenues for consumers,” he said.
Petter-Børre Furberg, Head of Telenor Asia, emphasized the strategic review process, stating that the market will benefit from a robust local champion post-sale.
Telenor Pakistan will continue its operations as usual, focusing on serving its 45 million customers during this transition. The agreement awaits regulatory approvals and is expected to be finalized in 2024.
Earlier this year, PTCL had indicated its interest in exploring investment opportunities in Pakistan’s telecom sector, marking this acquisition as a significant stride towards achieving its strategic goals.