According to Bloomberg, Telenor Pakistan is suddenly up for sale, despite being a growing network with rising stock prices. Telenor plans to sell its operations in Pakistan, which could be worth $1 billion. According to the people who asked not to be identified because they were discussing confidential information, the Norwegian telecommunications operator is working with Citigroup Inc. and will invite first-round bids for the business later this month. Telenor announced in July that it would conduct a strategic review of its Pakistan unit after incurring a 2.5 billion krone ($240 million or Rs.5.3 crore) loss on operations in the emerging market.
Many buyers with existing operations in Pakistan from the Middle East and Asia are expected to show interest. They stated that discussions are ongoing and that there is no guarantee that they will result in a transaction. Citigroup and Telenor representatives declined to comment. Telenor’s shares increased by up to 2.4% on Wednesday. In Oslo, the stock rose 1.8 percent, valuing the company at $13 billion.
Telenor reported in October that underlying earnings in Pakistan fell 22 percent in the third quarter, owing in part to rising energy prices in the country. This was offset by a gain from the repeal of a SIM tax in Pakistan. The profit of 600 million kroner ($57.79 million) in Pakistan, one of Telenor’s four Asian markets, was due to a court decision regarding the applicability of tax on mobile phone SIM cards from 2014 to 2020.
We know that PTCL was in advanced negotiations with Telenor, but the outcome is unknown. According to Bloomberg, the development has reached its conclusion at this point. Recently, Telenor Group’s CEO reaffirmed plans for realignment of Asian operations, and today’s Bloomberg report appears to be about the same development. Telenor announced in July that it would conduct a strategic review of its operations in Pakistan after investing $244 million in the country’s struggling economy.
Without naming anyone, Bloomberg reported that entities based in the Middle East and Asia that are already working in Pakistan are expected to participate in the bidding process later this month. Talks are ongoing, and the Norwegian telecom company is optimistic that they will bear fruit.
Telenor, which has 175 million customers in eight Nordic and Asian countries, has sought to cut costs and increase cash flow in recent years in order to fund higher dividends and 5G investments. To date, the company’s most significant moves have included plans to consolidate markets in South-East Asia, including a $15 billion merger to form a telecoms leader in Malaysia and a $8.6 billion deal in Thailand. Telenor Asia manages both units, as well as the company’s operations in Pakistan and Bangladesh.
During the first three quarters of 2022, Telenor Pakistan’s revenue fell by around 8% in Norwegian Kroner terms while increasing by 4% in rupee terms, remaining at NOK 3.390 billion (Rs82.57 billion) compared to NOK 4.270 billion (Rs79.36 billion) during the same period in 2021.
Telenor Pakistan reported total revenues of NOK 1.320 billion (Rs 29.53 billion) in the third quarter of 2022, compared to NKO 1.425 billion (Rs 26.68 billion) in the same period last year, i.e. 2021, and recorded a 7.5 percent decline in NOK terms and a 10% increase in rupee terms. During the quarter, the Group’s Pakistan business was impacted by unprecedented flooding. The situation impacted consumer spending power and caused network outages as well as increased costs.