KARACHI: Top officials of Telenor Pakistan on Thursday denied that the Norwegian telecommunication operation was winding up its operations in the country, referring to reports its ownership was changing hands as “speculation.”
Local and international media reports have claimed that Telenor Pakistan, the second-largest mobile phone network in the country, is shutting down operations. As per reports, the telco is facing difficulty in operating owing to the rising cost of business.
The rising cost of fuel and dollars in Pakistan have forced various multinationals, including telco companies, to face a financial crunch. However, senior officials of Telenor Pakistan denied the company was closing operations in Pakistan, referring to the reports as “untrue” and “based on speculations.”
“No, it is not true, there is no such thing happening,” Irfan Wahab Khan, CEO of Telenor Pakistan, told Arab News on Thursday in a terse response. He added that “the news of [Telenor’s] acquisition is not correct.”
Telenor in Pakistan enjoys a 25.20 percent market share with over 48 million subscribers as of October 2022. The network comes second when it comes to subscribers only to Jazz, which has a market share of 38.55 percent, as per the Pakistan Telecommunication Authority (PTA).
The Norwegian group operator has seen high energy prices as a headwind in Pakistan and Norway, and Denmark.
An impairment of NOK2.5 billion ($251 million) was recognized in the second quarter of 2022 related to property, plant and equipment and right-of-use assets in the Telenor Pakistan segment, the Telenor Group said in its quarterly report issued in October 2022.
Telenor Pakistan pointed out that in Pakistan, service revenues, on an underlying basis, had also been impacted by the recent floods in the country.
“Service revenues, on an underlying basis, decreased by 3 percent, negatively impacted by the devastating floods,” the report said. “However, data revenues increased by 18 percent. Reported service revenues increased by 10 percent, positively impacted by the reversal of sim tax provision.”
Based on the company’s profitability amid Pakistan’s unstable economic situation, local and international media reported that the company was in the process of exiting from Pakistan after selling its assets.
A day earlier, an English-language daily, Dawn, reported that a United Arab Emirates-based telecom operator was in talks with Telenor to buy it in Pakistan, for which the Norwegian company has engaged investment banks. The report did not name the Emirati company that wants to buy Telenor operations in Pakistan.
However, Telenor officials declined to comment on the reports, referring to them as ‘speculations’.
“These reports of sellout and acquisition are based on speculations, and we can’t comment on such speculations,” Telenor Pakistan spokesperson, Saad Mustafa, told Arab News.
“Like every company, Telenor Pakistan also decided to plan its strategic review under the current circumstances because many other players are also being impacted, so we have to see how we can solidify our operations; these are merely the considerations,” he added.
Though Telenor Pakistan officials have denied the organization is leaving Pakistan, telecom experts say news of Telenor Pakistan exiting the country is confirmed.
“It is confirmed that they want to exit because of the economic condition and profitability [situation],” Parvez Iftikhar, an international telecom policy and regulation consultant, told Arab News.
“The exit is not easy, it will take a year or two due to regulatory formalities,” he said, adding “it is not clear who is buying [Telenor Pakistan] the rest are rumors.”
In 2015, VimpelCom, a holding company of Mobilink, acquired UAE’s Warid Telecom, which was described as the first mobile telecommunications acquisition in Pakistan that later became Jazz.
If Telenor Pakistan’s acquisition materializes, it will become the second mobile phone operator to exit Pakistan, a country that has 194 million cellular subscribers.
