Three bidders selected for PTCL stake sale

4 Jun 2003

The long-awaited privatisation of Pakistani incumbent Pakistan Telecommunications Limited (PTCL) looks set to go ahead later this year after the Privatisation Commission announced that it would allow three foreign companies to bid for a stake. The government, which currently owns an 88% stake in the PTO, first announced plans for privatisation in April 2001, but, despite receiving bids from five interested parties, postponed the sale following the 11 September terrorist attack in the US which it claims led potential investors to rethink plans to enter the country. In mid-2002 the state began to refocus on the privatisation process, and appointed a financial advisory consortium co-led by Goldman Sachs International and JPMorgan to oversee the sale. The companies which have passed the pre-selection process are Saudi Oger Ltd, Egyptian cellco Orascom Telecom and the Menera Telecom Consortium; they will begin due dilligence work later this month. The government is yet to announce an official date for the sale.

PTCL embarked on a major restructuring scheme during 2002 in a bid to prepare itself for the entrance of competition at the beginning of 2003. By the end of 2002 it had installed 506,117 new lines taking the total to 4.33 million, up from 3.66 million in June that year. It also claimed to have digitalised 99% of its network. The fixed line market in Pakistan is highly under-penetrated; at the end of 2002 teledensity stood at just 2.9%. The government hopes that the entrance of a foreign backer at PTCL and the onset of competition will lead to a significant increase in the number of fixed lines.

Pakistan,
CIT’s Datafile of Asia-Pacific Telecommunications

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