Considering the worsening macroeconomic situation in Pakistan, Telenor is expected to end its operations in Pakistan very soon. After a deliberation of months considering a merger with a different telecommunications company, they have decided to go against it.
However, things aren’t looking so good for the company so far. At the moment, they have made no announcements regarding closing its business in the country, but it looks like the option is not off the deck just yet. Considering the stakes Telenor has in Pakistan, there is a high probability that they will scale their services down before making any drastic decision.
Telenor’s Current Condition in Pakistan
Currently, Telenor has approximately assets worth of $250 million in Pakistan, rounding up the business in the country may not be easy. President and Chief Executive Officer of Telenor, ASA, Sigve Brekke said in a recent statement:
“We will definitely look at what is creating shareholder value when we do the review, but I don’t want to comment on the content of that review. Of course, it is looking at operation, can we run that more efficiently than we already do but we are also looking at any other types of alternatives for us to secure our value in Pakistan.”
Telenor has to pay a higher interest rate to renew its license in Pakistan due to the higher judiciary decision. The telecom sector of the country has faced multiple financial difficulties due to the current hike in interest rates, depreciating exchange rates, and the worsening macroeconomic situation.
As of now, the telecom sector has aired its grievances with the Government. Among the reports shared, they also shared with the government that their revenue per user has declined in the country. Only a few years ago, the revenue stood at $9 per user, and now it is very much below that in other regional markets of Pakistan.
Despite the government’s previous orders to give some relief to telecommunication companies such as Telenor, the brands are still thinking things through. Telenor is just one of the companies thinking about their operations in Pakistan. With interest rates going up by 15%, many companies are thinking things through.
In fact, Jazz Telecom’s CEO has also told his employees that some tough decisions are about to be made. It is expected that the privileges and perks of the employees may be cut down in the coming days. Only time will tell what Telenor’s decision will be.