China Mobile has transferred $700 million to Pakistan as the first chunk of its $2 billion investment plan during the next three years, it is learnt. Sources in telecom industry said that the company would operate in Pakistan under name of CM-Pak, (China-Mobile Pakistan) and would also introduce new brand name, rather than operating with the Paktel.
However, the new brand name has yet to be finalised. The company plans to invest $2 billion up to 2009 to expand its network by installing 2500 'towers' each year across the country. It plans to install total 7500 towers by 2009.
A senior official of the company confirmed to Business Recorder that the entire investment would come from China, and no loan would be taken from the banks in Pakistan. The company has also submitted its future investment plans to the regulator, Pakistan Telecommunication Authority, along with $30 million as licence fee instalment for taking over Paktel.
He said that the China Mobile, after paying Rs 1.9 billion, which includes $29.1 million as instalment of Initial Licence Fee (ILF) and charges related to spectrum allocations and technical services has officially taken over Paktel and is free to go ahead with its investment plan.
The Paktel, which owed $29 million to the PTA on account of ILF, was not allowed to wind up its operation without clearing the dues. Paktel had got its licence renewed during 2004 and 2005 against the licence fee $291 million but got defaulted due to non-payment of $29.1 million ILF instalment, which was due in October 2006. The PTA had asked Paktel parent company, Millicom International, to clear the dues when it announced to wrap up its operations in Pakistan. In January, 2007, the China Mobile struck a deal with Millicom International at a cost of $284 million to take over Paktel.
Sources said that CM-Pak was busy in hiring services of vendors to set up an entirely new network to become competitive in a market already dominated by six cellular operators with over 40 million subscribers.
Telecom players believe that China Mobile has a history of interest in Pakistan's cellular market, as initially it attempted to get a GSM licence in an open auction in 2003, but could not achieve success because of Telenor's higher offer.
By December 2006, Paktel boasted 1.3 million cellphone users, which ranked the company as fifth in terms of market share among six cellular operators with a total 48.50 million cellphone users across the country.
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