The combined business to provide service to 45M subscribers
Pakistan mobile network operators Mobilink and Warid Telecom announced they have reached an agreement to merge their operations.
The combined business is set to serve 45 million customers in Pakistan. The transaction, which still needs approval from local regulatory authorities, is the first merger in the mobile telecommunications sector in the Asian nation.
Mobilink is owned by international mobile operators VimpelCom and Global Telecom Holding, while Warid Telecom is controlled by the Dhabi Group.
“With the addition of Warid to our already-customer base at Mobilink, we will serve more than 45 million customers and offer a best-in-class mobile and high-speed data network,” said VimpelCom CEO Jean-Yves Charlier.
Warid Telecom is currently offering LTE services, initially launched in January, through spectrum in the 1800 MHz band.
Mobilink ended the third quarter of the year with 35.2 million mobile customers, according to VimpelCom’s latest financial report. By the end of Q3, the operator’s 3G network reached 200 cities across the country.
“Warid, with its strong postpaid base and high-quality 4G LTE network, will complement Mobilink’s position in the market. We are very pleased to continue to contribute to the strengthening of the competitive landscape for the broader telecom sector and the overall economy of Pakistan,” said Dhabi Group Chairman Sheikh Nahyan Mubarak Al Nahyan.
The transaction is expected to create capital expenditure and operating expense synergies with a net present value of approximately $500 million. The combined revenue of both telcos for the 12 months ended September 2015 was $1.4 billion.
The board of the new company will consist of seven directors, of whom six will be nominated by VimpelCom and GTH and one nominated by the Dhabi Group shareholders. Under the terms of the agreement, Mobilink will first buy all of Warid’s shares. The Dhabi Group shareholders will then take a 15% stake in Mobilink. Following the completion of the transaction, the parties will merge Warid into Mobilink.
The companies said they expect the transaction to be completed within the next six months, and to complete the merger process within six months from the closing date of the transaction.
