PSO Looks to Acquire Telenor Pakistan Despite Financial Difficulties
PSO Looks to Acquire Telenor Pakistan Despite Financial Difficulties
Telenor Pakistan’s Poor Strategy Puts Business in Hot Water
Telenor Pakistan’s Poor Strategy Puts Business in Hot Water

Telenor’s poor Strategy and performance, low earnings, and the unsettling impacts of currency parity have all added to the strain on a once-powerful Telenor Pakistan. A reported $244 million impairment in July 2022 and a 22% reduction in profitability in Q3 2022 have overshadowed its Pakistan business.

Read More: PTCL’s strong financial performance during 2022

Possibly in 2021, rumors of a merger or even an outright exit were rampant. While Telenor’s CEO, Irfan Wahab Khan, flatly denied the notion at that time, there was no disagreement when Bloomberg reported in early November 2022 that Telenor ASA is in talks with Citigroup to sell its Pakistan operations for a billion dollars.

In the current fog that has engulfed Telenor, it is easy to lose sight of 2005, when two foreign telcos entered Pakistan at the Pakistan Telecommunications Authority’s invitation. One comes from Norway. The other is from the United Arab Emirates. Both introduced a cultural dimension to Pakistan that it had not experienced before.

Expectations were sky-high, and because Telenor was planned to deliver services first, an arresting launch in March 2005 was anticipated. When Telenor failed to deliver the exciting launch that everyone expected, industry analysts were dissatisfied. In retrospect, the Norwegians did not deviate from their cultural ideal of tolerance, self-sufficiency, and “not bothering others.” They proceeded discreetly but professionally with the business of providing an exceptional and sophisticated telecom service, both in terms of technology and branding.

Two months later, the audience was treated to the great spectacle they had been anticipating when Warid’s launch resulted in the telco gaining one million users in less than three months and a 7% market share. Warid had the largest postpaid customer base in Pakistan, backed up by the best data network in the country, thanks to an infrastructure agreement with Ericsson and a technology-neutral license. Most notably, it had the highest postpaid ARPU, outperforming even market leader Mobilink.

While Warid focused on urban center expansion, Telenor focused on brand building. The emphasis was squarely on two areas: long-term perception and research. This approach was particularly visible in the way Djuice, its ‘young brand,’ was promoted. Telenor launched Djuice in Pakistan in October 2006, building on its success in Bangladesh. Jazz Octane was its lone opponent in this ‘new’ area at the time, as Warid’s Glow and Ufone’s Uth had not yet been released.

Telenor’s very assertive move from the normal bit-pipe telecom strategy model to the smart-pipe one – with the introduction of Easypaisa – became the first telco to offer mobile financial services, and is the topic of many academia-backed case studies. As a result, Telenor, the smart telco, appeared to be unstoppable for many years. Unfortunately, the Telenor brand’s veneer suffered unavoidable harm when the harsh realities of the Pakistan market began to take impact. Persona, Telenor’s postpaid brand, could not compete with Mobilink’s Indigo’s inventiveness or Warid’s exceptional postpaid ARPU ranking. Tameer, Easypaisa’s banking arm, suffered losses as a result of a lower credit base and inadequate management. With Raast’s implementation gaining traction, it is battling to recoup the losses previously experienced in this sector, as money transfer services account for 60% of its branchless banking business.

However, Telenor’s extraordinarily sophisticated brand creation and analytical marketing in its early years were not carried over to more recent ones. Telenor, too, went into sleep as telecom strategy in Pakistan became a game of numbers and low-cost solutions.

The new Telenor buyer may be successful in cutting costs for operational efficiency, but the asking price will never be enough to restore the vibrancy and spirit of the Telenor brand. Neither is it the ethos of a business that helped lay the groundwork for Pakistan’s telecom strategy. TalkShawk, whose faint vestiges may still be seen on a few half-broken village walls on the road from Sehwan to Kandiaro, will never grace us with their presence.

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