Etisalat’s Pakistan affiliate has made a bid for Warid Telecom, a move that could spark a bidding war with China Mobile and VimpelCom.
According to a filing with the Karachi stock exchange seen by Reuters, PTCL has made a bid to buy Pakistan’s fifth-largest operator, which is valid for 30 days. The price of the offer was not disclosed.
Etisalat was previously reported to have hired Goldman Sachs as an adviser on a potential bid. The UAE-based group holds a 26 per cent stake in PTCL and has management control of the business.
Reuters reported in June that Warid Telecom had been put up for sale by its owner Abu Dhabi Group, for a value of around $1 billion.
China Mobile Pakistan recently confirmed its interest in bidding for Warid, although no bid has yet been made. China Mobile is believed to have hired Dubai-based investment bank MAS ClearSight to evaluate a bid and assist it in the process.
VimpelCom, which controls Pakistan’s largest operator, Orascom’s Mobilink, has also been linked to Warid, with banking sources saying in July that the company is assessing a bid.
If PTCL is successful with its bid, the combined company would become the second-largest operator in Pakistan. According to GSMA Intelligence estimates, PTCL’s Ufone brand had 24.1 million connections at the end of the third quarter, making it the third-largest operator in Pakistan. The addition of Warid’s 12.5 million connections would give it a combined 36.6 million connections, just behind the 37.3 million of market leader Mobilink.
The combination of Warid and China Mobile’s Zong, which has an estimated 20.4 million connections, would create the third-biggest operator in the market with 32.9 million connections.
The Pakistan mobile market could benefit from consolidation with margins having been squeezed in recent years due to increasing market penetration and competition.