Millicom's exit from Paktel finalised: PTA grants conditional NoC

The Pakistan Telecommunication Authority (PTA) has granted NoC to China Mobile, with certain conditions to be fulfilled by February 28 as prerequisite for the approval to the deal.
Meanwhile, Millicom International Cellular has announced that it has completed the sale of its 88.86 percent shareholding in Paktel to China Mobile for $284 million in cash, which finalises Millicom's exit from Pakistan. The other main shareholder in Paktel is the Arfeen Group with 10 percent holding.
Paktel's parent concern, Millicom International Cellular, had signed an agreement for the sale of its 88.86 percent stake to China Mobile Communications on January 21, after which China Mobile team held a detailed meeting with PTA chief and briefed him about their future plans in Pakistan.
The transaction implies an enterprise valuation for Paktel Limited of $460 million. Total cash consideration payable to Millicom as a result of the transaction (including the repayment of inter-company debt) is approximately $284 million.
Sources told Business Recorder that PTA had granted the NoC to Millicom-China Mobile with certain conditions, including payment of $30 million spectrum charges and formation and registration of the new board.
Sources at PTA said that the Authority had no reservations in granting the approval, once the requirements were met. They said that PTA had given a deadline, of February 28, for these conditions to be fulfilled.
However, when the Millicom-China Mobile had yet to receive the PTA approval, the Asian giant immediately after signing the agreement with the Luxembourg cellular company, started survey of the country's sector market to design a comprehensive policy before entering the fastest growing market of the region.
China Mobile has a history of interest in Pakistan's cellular market, as it attempted to get a GSM licence in an open auction in 2003 but could not succeed due to higher offers made by Telenor and Warid.
With more than 250 million wireless customer accounts as of last month, China Mobile is by far the world's biggest wireless carrier and controls about two-thirds of the mobile market in China.
Though Millicom's Pakistan operations was not in a very attractive position, the country offered one of the best business opportunities to telecom operators, as its most of the rural areas are without basic telecom facilities, sources said.
By December 2006, Paktel had enjoyed 1.3 million customers, which ranked the company at fifth in terms of market share among six cellular operators with total 48.50 million cell phone users across the country.