The telecom industry in Pakistan is about to undergo a major transformation. Telenor Pakistan, the country’s second-largest cellular service provider, may soon change hands.
Telenor Pakistan is in talks to sell its operations to an Emirates-based multinational corporation.
According to the source, the Emirati firm has a strong presence in Pakistan. In addition, Telenor is in advanced talks with Telenor to acquire its operations.
A well-placed source in the IT ministry also confirmed that a deal is nearing completion. Furthermore, it refused to share any additional information on the record.
A prospective buyer is looking to acquire Pakistan’s second largest telecom provider for less than $1 billion.
The Emirati firm already has a significant presence in Pakistan. According to the sources, the company has a presence in all key areas of the telecom sector and is interested in further consolidating its position.
Citigroup was hired by the Norwegian telecom operator to conduct the bidding process.
However, according to an industry source, the Norwegian firm has hired not one, but two renowned multinational investment banks to handle the sale.
The source cited the rising cost of doing business as the primary reason for the sale, claiming that the company had begun to lose money due to the rapid appreciation of the US dollar.
According to the source, the company’s operational costs have reached $55 million, with the majority of this consumed by electricity prices — documents show that in the previous fiscal year, the company paid around $17 million in power bills alone to keep its infrastructure running.
Given this, experts say it’s understandable that Telenor Pakistan would seek to cut its losses and, from the company’s perspective, prefer to expand into a region with better business prospects or rates of return than Pakistan.
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