Regulatory approvals delayed: H1 closure likely for Telenor’s PTCL acquisition

ISLAMABAD: Due to delays in obtaining regulatory approvals, the transaction for Pakistan telecommunication Company Limited’s acquisition of Telenor Pakistan is expected to close during first half of 2025.

This has been revealed in the Telenor Group fourth quarter report. The report noted that Telenor signed an agreement on 14 December 2023 to sell 100 percent of its telecom operations in Pakistan, Telenor Pakistan (Private) Limited, to Pakistan Telecommunications Company Ltd, the national telecommunications and ICT company in Pakistan.

The agreement is subject to regulatory approvals and customary terms and conditions.

The Group in its third quarter report had announced that the closing transaction for the sale of Telenor Pakistan to PTCL was expected to slide into early 2025.

Due to delays in obtaining regulatory approvals, Telenor Pakistan does not meet the criteria to be classified as held for sale as of 31 December 2024. The transaction is expected to close during first half of 2025, it added.

“While our group Outlook for 2025 includes Telenor Pakistan, we still expect the divestment of this business to close by the first half of 2025. However, we do not expect the exact timing of such an event to materially influence the group Outlook”, it added.

“We are also observing deterioration of the political and economic situation in Pakistan, which may increase the risk of civil unrest, security concerns and financial instability”, the report noted.

The report noted Telenor Pakistan delivered an impressive service revenue growth of 12 percent, mainly driven by continued success with their monetisation strategy. ARPU increased by 13 percent, offsetting the 2.7 percent decline in subscription base, aligning with the strategy to focus on quality customers and controlled churn. On the cost front, a decline in fuel prices has eased the macroeconomic pressures seen earlier this year. Along with continued focus on cost optimising efforts and a strong top-line, Telenor Pakistan was able to deliver a solid EBITDA growth for the period at 25.2 percent.

The mobile subscription base in the controlled operations in Asia declined by one million during the quarter, primarily in Pakistan, ending the year with 43.2 million subscriptions in Pakistan and 84.3 million subscriptions in Bangladesh.

The report noted that despite strong growth in Pakistan, overall EBITDA for Asia declined by 5.7 percent, where Grameenphone’s top line decline coupled with higher opex has negatively impacted EBITDA for Asia.

“In Asia, our performance was hampered by the macro-economic situation in Bangladesh as well as a number of one-offs. Early signs of economic recovery at the beginning of the quarter were offset by increased inflation and tightened monetary policy. We remain confident in the strength of our operations and the eventual recovery of the economy. This was partly offset by strong performance in Telenor Pakistan, thanks to a continued impressive effort by our team”, it added.

In Asia, service revenues decreased by 3.3 per cent, driven by a decline in Grameenphone due to the challenging business environment in Bangladesh, partially offset by growth in Telenor Pakistan. Additionally, Amp continued to grow, primarily through the IoT provider Connexion.

Total other expenses this quarter of NOK 400 million consisted mainly NOK 254 million losses on disposals of fixed assets and operations, of which NOK 107 million in Telenor Pakistan, and NOK 152 million workforce reductions, of which NOK 55 million in Telenor Norway.

The tax expense for the fourth quarter was NOK 866 million and the effective tax rate was 28 per cent compared to -31 per cent in the same period last year. The effective tax rate was positively impacted this quarter by recognised deferred tax asset in Telenor Pakistan of NOK 227 million.

Copyright Business Recorder, 2025