Zong telecom indicates merger on the cards

Zong, one of Pakistan’s largest mobile network operators is now sighting for a possible merger in the country dynamic telecom sector.

According to local media reports, Zong CEO Liu Dianfeng, said that as far as the telecom sector of Pakistan is concerned, there can be only three mobile operators in the country as opposed to current five, citing low margins on return.

“It is difficult to make profits in Pakistan’s market and the return on investments comes in different outlines,” Liu said. “Maybe, in the future, we can think of buying an operator,” the chief added.

Liu informed that despite massive investments worth some $3 billion, Zong is finding hard to bounce back.

Liu was critical towards the taxation policy adopted by Pakistan’s government on the telecom industry, saying, “To develop a 4G market and installing these sites is a big challenge especially when the government is continuously burdening the industry with heavy taxation, the recent example of which is the taxation proposal on smartphone handsets.”

The possible merger would be nothing new to the country’s vibrant telecom sector, which has witnessed a fair share of mergers and break-ups, the Warid-Mobilink merger is one recently approved by the Pakistan Telecommunication Authority (PTA).