Pakistani incumbent PTCL is reported to have launched a takeover bid for local mobile rival Warid, holding out the possibility of much-needed consolidation in the country’s beleaguered telecoms industry.
Backed by Middle Eastern telecoms giant Etisalat (Abu Dhabi, United Arab Emirates), PTCL (Islamabad, Pakistan) is said to have given notice of the bid through a filing to the Karachi stock exchange, according to Reuters, but details of the offer price or PTCL’s plans for the company were not disclosed.
However, Reuters had reported in June that Warid had gone up for sale and was likely to attract a price of about $1 billion.
A takeover would help PTCL to advance its ambitions in Pakistan’s mobile market, where it trails both VimpelCom-owned (Amsterdam, Netherlands) Mobilink and Telenor (Fornebu, Norway) on market share.
Warid is currently the smallest of the five main players and has been losing customers over the past few years in the face of stiff competition from Mobilink, Telenor, PTCL and fourth-placed Zong, owned by China Mobile (Beijing, China).
Nevertheless, according to Reuters, PTCL’s bid could face a challenge from China Mobile, which is said to have expressed interest in acquiring Warid as recently as September.
PTCL’s move could also run into regulatory opposition – especially as Etisalat is still embroiled in a dispute with Pakistani authorities over its acquisition of PTCL shares in 2006.
An investment consortium led by Etisalat then paid $2.6 billion for 26% of PTCL, but Etisalat is reckoned to owe about $800 million on the deal, while the government has yet to transfer ownership of various real-estate properties to PTCL.
Despite Pakistan’s problems, many telecoms investors regard the country as an attractive long-term opportunity because of its size and with 3G licenses yet to be awarded by local authorities.