Etisalat ‘top bidder’ for Transworld Associates

PTCL, which has 60% market share, connects Islamabad with the cyber world through South East Asia-Middle East-Western Europe-3 (SMW-3), SMW-4 and India-Middle East-Western Europe (I-ME-WE). PHOTO: FILE

KARACHI: 

Etisalat, the UAE-based parent company of Pakistan Telecommunication Company Ltd. (PTCL), is in final talks with the management at Transworld Associates (TWA) to acquire 100% stakes in the latter, it has been learnt by The Express Tribune.

Sources, on condition of anonymity, confirmed that Etisalat is in the final round of negotiations with TWA but did not disclose the transaction value, while also refraining from giving a timeline for the possible takeover.

Meanwhile, discussions on the matter have been going on for a while in the UK, an official said, adding that the management was likely to change after the takeover.

While the official was unable to confirm the status of merger talks with Etisalat, it was added that Russia’s VimpelCom and Abu Dhabi Group also submitted their bids for the acquisition.

The TWA is a joint venture of Egypt’s Orascom Telecom Holding (52%), Pakistan’s Saif Group (32%) and Omzest Group of Oman (16%). PTCL and TWA are the only two operators that bring international bandwidth and internet connectivity to Pakistan through four submarine cables.

PTCL, which has 60% market share, connects Islamabad with the cyber world through South East Asia-Middle East-Western Europe-3 (SMW-3), SMW-4 and India-Middle East-Western Europe (I-ME-WE). TWA, with its 40% market share, provides internet bandwidth to the country’s internet service providers (ISPs) through Transworld-1 (TW-1).

TWA exclusively sells bandwidth to corporate clients, ISPs, while PTCL is mainly on the consumer side, according to sources. Although the two already serve different market segments, observers say, TWA’s acquisition by Etisalat will create a monopoly at a larger level.

Meanwhile, the acquisition by Etisalat, if it goes ahead, will also have an adverse effect on the existing broadband operators as well as on the upcoming 3G operators, said a telecom official. Creation of a monopoly of PTCL over international bandwidth would defy the Competition Act, 2010 and the Telecommunication De-regulation Policy approved by the Federal Cabinet in 2003, he said.

Although the deal has not been finalised and officials, The Express Tribune spoke to, could not confirm the successful bidder but Etisalat, being a dominant player in the region, is said to be the favourite.

Even if TWA is acquired by Etisalat, both PTCL and TWA will work as separate independent entities with separate board of directors, added an official.