Category: Tech

Multiple online news outlets reported that Telenor, a telecom operator, intended to sell its business in Pakistan for $1 billion, which ignited a debate on social media.

There is a lot of uncertainty about the authenticity of this news since a few Telenor employees have also denied the reports and asserted that they are fake.

The company has yet to make an official announcement in this regard, with the exception of responding to a Twitter user’s question who asked whether these reports are legit. “We do not comment on speculations and rumours,” Telenor replied. 

According to Bloomberg, Telenor is moving forward with plans to sell its business in Pakistan, which might be worth $1 billion, according to people familiar with the situation.

The Norwegian telecommunications operator is working with Citigroup Inc. and will welcome first-round bids for the firm later this month, according to insiders.

Telenor announced in July that it would conduct a strategic assessment of its Pakistan unit after incurring a 2.5 billion-krone ($244 million) loss on operations in the growing market.

The people predict that strategic customers with operations in Pakistan from the Middle East and Asia will express interest. They stated that there is no assurance that the ongoing discussions would result in a transaction. Telenor and Citigroup representatives declined to comment.

Telenor’s stock increased as much as 2.4 per cent on Wednesday. The company’s market worth increased to $13 billion as the stock rose 1.8 per cent in Oslo.

In October, Telenor said that the third quarter’s underlying profitability in Pakistan decreased by 22 per cent, in part as a result of the nation’s growing energy costs. This had a negative effect, but it was partially offset by a gain from Pakistan’s repeal of a SIM tax.

One of Telenor’s four Asian countries, Pakistan, saw a gain of 600 million crowns ($57.79 million), which was related to a court ruling on the applicability of tax on SIM cards for mobile phones from 2014 to 2020.

In recent years, Telenor, which serves 175 million users across eight countries in the Nordic region and Asia, has worked to reduce expenses and increase cash flow in order to fund greater dividends and 5G expenditures. The company’s greatest efforts to date have involved attempts to consolidate markets in South-East Asia, including a $8.6 billion acquisition in Thailand and a $15 billion merger to create a telecoms leader in Malaysia.

Telenor Asia, which also manages the company’s operations in Pakistan and Bangladesh, is in charge of both units.

During the first three quarters of 2022, Telenor Pakistan’s income decreased by about 8 per cent in Norwegian Kroner terms but increased by 4 per cent in Pakistani Rupee terms, staying at NOK 3.390 billion (Rs82.57 billion) as opposed to NOK 4.270 billion (Rs79.36 billion) during the same period of 2021.

In comparison to NKO 1.425 billion (Rs26.68 billion) during the same period last year, or in 2021, Telenor Pakistan reported total revenues of NOK 1.320 billion (Rs29.53 billion) during the third quarter of 2022. This represents a 7.5 per cent decline in NOK terms and a 10 per cent increase in rupee.

Intense floods throughout the quarter had a negative impact on the Group’s business in Pakistan. Consumers’ purchasing power was impacted by the circumstance, which also resulted in network failures and raised prices.