Emerging markets telecom group, Millicom, said on Monday it was planning an exit from Pakistan market, due to tough market conditions, by selling or closing its Paktel business.
Millicom, which earlier this year held failed talks to be bought by China Mobile, the parent of China Mobile (Hong Kong) Ltd, has operations in Africa, Latin America and Asia. Paktel is the fifth largest mobile operator in Pakistan.
"Millicom had been considering significant investments to build market share in Pakistan, but the return on those investments had been overshadowed by ... challenging business conditions in the Pakistan mobile telephony market and frequency interference issues," it said in a statement.
It said Paktel had gained additional space in the 1800 Mhz spectrum, but that the grant was not permanent. The officials had also refused a request to delay payment of a $29 million licence instalment. "As a result, Millicom is considering sale of its interest in Paktel, but there can be no assurance that the sale will be consummated, and another option that may be considered is the closure of Paktel," it said.
It said that it could not estimate any impact on profit, loss or cash outflow, but that any impact would be lower than the loss it expects in 2007 and 2008 from Paktel. Millicom said it had been operating in Pakistan since 1990 and currently had 88.9 percent of Paktel Limited. As of September 30, Paktel had 1.5 million subscribers, up 62 percent year-on-year.