PTCL-Telenor Deal Faces Delays, Closing Expected in Next Two Months

ISLAMABAD: The PTCL-Telenor deal, involving PTCL’s acquisition of Telenor Pakistan, is facing delays due to pending regulatory approvals. The transaction, initially expected to close earlier, is now likely to finalize within the next two months.

Telenor Group signed the agreement for the PTCL-Telenor deal on December 14, 2023. The deal includes the sale of 100% of Telenor Pakistan’s telecom operations to PTCL. However, regulatory clearances and customary terms have caused delays. Earlier reports suggested the transaction might extend into early 2025, but recent updates indicate a revised timeline.

As of December 31, 2024, Telenor Pakistan does not meet the criteria to be classified as held for sale. The delays stem from regulatory hurdles, but the transaction is now expected to close within the next two months.

“While our group Outlook for 2025 includes Telenor Pakistan, we still expect the divestment of this business to close by the first half of 2025. However, we do not expect the exact timing of such an event to materially influence the group Outlook,” the telecom service provider said in its fourth quarter report.

“We are also observing deterioration of the political and economic situation in Pakistan, which may increase the risk of civil unrest, security concerns and financial instability,” the report noted.

Despite the delays, Telenor Pakistan has demonstrated impressive financial results. The company achieved a 12% growth in service revenue, driven by effective monetization strategies. Its average revenue per user (ARPU) increased by 13%, offsetting a 2.7% decline in the subscription base. Lower fuel prices and cost optimization efforts also contributed to a 25.2% growth in EBITDA.

The PTCL-Telenor deal is progressing amid a challenging economic and political environment in Pakistan. Rising inflation, civil unrest, and financial instability have raised concerns. However, Telenor Pakistan’s strong performance has been a positive factor, partially offsetting declines in other Asian markets like Bangladesh.

In Asia, service revenues decreased by 3.3%, primarily due to challenges faced by Grameenphone in Bangladesh. Telenor Pakistan’s growth and Amp’s expansion through IoT provider Connexion have helped mitigate some losses. The region’s overall EBITDA declined by 5.7%, impacted by macroeconomic pressures in Bangladesh.

Telenor Pakistan recognized a deferred tax asset of NOK 227 million, positively impacting the group’s effective tax rate for the quarter. Total other expenses for the quarter amounted to NOK 400 million, including losses on asset disposals and workforce reductions.