Telenor to Aquire 63 Percent Shares in Warid Pakistan
Dhabi Group seems to have lost interest in Telecom business which it started with Warid Telecom Pvt Ltd, Pakistan back in 2005. The Source told that Telenor is ready to buy 63 percent shares in Warid Telecom, Pakistan against USD 1.3 billion. Dhabi Group will retain 7 percent shares in the company, while other 30 percent are with Singtel.
If Telenor goes with the deal, it will have largest network in the country crossing even Mobilink’s 10,000 cell sites.
Warid’s spokesperson has not authenticated this news, while Telenor said that they don’t comment on rumors or speculations. The sources said that whole talks went through in a smooth way, especially when Telenor offer for purchase is pretty acceptable for Dhabi Group. Final discussions went through last week in Abu Dhabi when Telenor’s top management was there to finalize the matters.
Sources further confirmed that buyout will remain under cover until certain requirements are met, including clearance of liabilities and certain amount of expense cut in Waird. Hard one, but a fact can be certain job cuts in Warid in near future if this is going to happen. Telenor is expected to take control over the new company by February 2010 till then Warid will have to clear its financial position.
Sources at PTA have communicated us that they are aware of the situation, however, approval hasn’t been asked by Telenor or Warid, as of now. PTA will approve the application with no objection.
According to sources, Warid Telecom, Pakistan is in serious trouble since the last two years as the company never appointed a permanent CEO after the first Chief Executive Officer Hamid Farooq left the office due to conflicts with the other senior management. In 2008, company remained highlighted due to massive financial embezzlement committed by marketing and sales staff. There are also reports that Warid is among leading operator to have hit by “668 activity” launched by PTA to filter and block the illegally issued SIMs. The company is still in talks with its annoyed franchisees on account of unpaid commissions during the last 2 years. According to one of the vendors, there is no major network expansion since February 2009 and everything is on hold. Telenor Pakistan and Warid Pakistan started operation almost simultaneously but Warid has around 4,500 cell sites so far and Telenor has installed over 6,300 cell sites in the same period.
It was further revealed that both Warid and Telenor will keep working with their brand identities, and no merger in operations will happen. However, Telenor will takeover the control of company that means it will appoint its own senior management. We are also told that Telenor has chosen the next CEO of Warid.
All this means that distributors/franchisers need not to worry about the takeover, as their operations will keep rolling the way they are. Instead, their long awaited commissions/payouts are supposed to be released in near future. (but according to new formulas, derived by management last month).
As both the brand will retain their identity, market dynamics may not change largely. Mobilink will remain the significant market player. However, Telenor will inject fuel for sure especially in marketing, customer support and HR departments of Warid.
via: ProPakistani
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