China Mobile, Etisalat weigh bids for Paks Warid Telecom

Written by Reuters | Dubai | Updated: Jun 26 2013, 09:01am hrs
Pakistan mobile operator Warid Telecom has been put up for sale by its Abu Dhabi owners and is likely to draw interest from China Mobile and Etisalat , sources familiar with the matter said on Tuesday.

The Abu Dhabi Group, a conglomerate led by a ruling family member in the oil-rich emirate, is seeking to sell all 100% shares in Warid Telecom, two of the sources said, speaking on condition of anonymity. The third source, however, said the company would also be prepared to sell a smaller controlling stake.

Pakistans telecommunications sector has five operators and is ripe for consolidation after a period when a troubled economy, increasingly high levels of market penetration and stiff competition has forced companies margins lower.

The sellers have mandated US investment bank Lazard and British lender Standard Chartered as advisers for the process, the sources said. One estimated a sale could fetch about $1 billion.

Walid Irshaid, the chief executive of Pakistan Telecommunications (PTCL), a unit of United Arab Emirates-based Etisalat, said the company is weighing a potential bid.

We are interested to see if it makes sense for us, but its not only us. Warid is an existing operator that has been here for many years and so were saying lets look at the prospects, he said.

There are too many players in Pakistan. Margins have eroded for everybody and the market must consolidate were all operating under low margins and low ARPU (average revenue per user) and that isnt long-term sustainable.

Warid Telecom declined to comment. China Mobile, which has increased its subscriber base by nearly three-quarters since 2010-11 and operates under the Zong brand, was not immediately for comment.

Warid launched its cellular services in Pakistan in May 2005 and had 12.54 million subscribers at the end of March of this year, down from 17.39 million in 2010-11, making the company the countrys smallest operator.