Pakistan’s Telecom Industry on the Brink of a Major Shift

Pakistan’s telecommunication sector has been consolidating over time and the trend is expected to continue with recent news reports highlighting Telenor Pakistan’s interest to buy a majority stake in Etisalat’s Ufone in the country as well as in the UAE. Telenor and Ufone are currently the 2nd and 4th largest telecom and digital service providers in Pakistan.
Credible sources privy with the development have confirmed these reports in the past few days. Pakistan’s top journalist, Waseem Badami tweeted recently underlining the legitimacy of this initiative that is on the horizon for one of Pakistan’s most crucial sectors.

A few days ago, Telenor Group CEO, Sigve Brekke stated that Telenor was looking for merger opportunities across Asia as well as in Pakistan. His statement fueled speculations that the company was considering drastic actions with respect to its operations in the country.
A merger of Telenor Pakistan and Ufone will collectively propel their subscriber base slightly above Jazz which recently acquired operations of Warid Telecom in the nation. Together, both organization will have 72 million subscribers compared to Jazz’s 71 million making Telenor the largest player in the market by a slight margin.

Consolidation of operations has become a norm in Pakistan and the industry is shrinking in terms of total players. The merger of Telenor and Ufone will leave only three stakeholders in the market namely Jazz, Telenor and Zong. Experts believe that this development can go either way in terms of competition, services available to customers and overall performance of the respective organizations.
Telenor Pakistan has remained robust despite difficult times delivering financial results while also investing in digitization efforts across a variety of segments like fintech, healthcare and education to name a few. The company increased its operational profit by 12.9% year-on-year according to financial results made available for the quarter ended July-September 2021. The company’s subscriber base grew by 6% during the same period, now standing at 48.9 million.

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