Dubai: The Pakistan-based subsidiary of UAE’s e&, the tech-telecom holding group, is buying 100 per cent in Telenor Pakistan. The deal, on an enterprise value basis, comes to 108 billion Pakistan rupee.
Having launched in 2005, Telenor Pakistan has around 45 million subscribers in the country, helping generate revenues of 112 billion Pakistan rupees and on an EBITDA margin of 43 per cent (based on a last-12-month basis up to September).
The UAE company has over the recent past been making significant investments in overseas telecom entities such as Maroc in Morocco as well as UK's Vodafone. This builds on its owned operations such as Mobily in Saudi Arabia and Pakistan Telecommunication Company, which spearheaded the deal in Telenor Pakistan. (The latter is part of Norway's Telenor Group.)
"The transaction provides an opportunity for in-market consolidation in the Pakistani telecom market which will predominantly lead to an improved long-term outlook of the telecom sector," e& said in a statement. (e& has a 23.4 per cent holding in Pakistan telecommunication Co.. It had bought a stake in 2005.)
The deal will be financed by external debt to be raised by PTCL.
Combined might in subscriber numbers
For Pakistan Telecommunication Co., the deal will help build on the 70 million plus subscribers, which apart from mobile services include fixed telephony and micro-financing.
"The transaction aligns with e&’s objective to enhance the growth profile of the international telecom vertical by accelerating e& and PTCL efforts to build a prosperous and digitally connected nation and position PTCL as the national champion to support Pakistan’s digital transformation," the statement added.
What e& stands to gain
On its financials, the buy should translate into an 'incremental' gain of about 8 per cent and 7 per cent of e& international’s revenues and EBITDA respectively (based on last 12 month to September numbers).
