WARID TELECOM ENTERS INTO AGREEMENT WITH SINGTEL
SingTel Acquires 30% stake
KANWAL SALEEM, Lahore
July 16 - 22, 2007
Warid Telecom which is the third largest mobile operator in Pakistan, with a market share of 16.6%, and nearly 9.7 million subscribers, has recently entered into a definitive agreement with Singapore Telecommunications Limited ("SingTel").
Under the agreement, SingTel will acquire a 30 per cent equity stake in Warid Telecom for an estimated US$758 million. In just two years from its commercial launch in 2005, Warid Telecom has reached nearly 9.7 million in reported subscriber numbers, representing an estimated market share of 16.6%, and making it the third largest mobile operator in Pakistan.
With a large population in excess of 160 million growing at over 2 per cent per annum, and a young median age of 20 years, Pakistan represents the sixth largest population base in the world. Fuelled by foreign direct investment, its economy has seen strong growth over the past few years. With a current low mobile penetration rate of 36 per cent, and a strong regulatory regime, the Pakistani cellular market is one of the most attractive in the world and has recently attracted sustained interest from international telecom operators.
SingTel will invest US$758 million (subject to closing adjustments on completion of the transaction) to acquire a 30 per cent stake in Warid Telecom, valuing the company at an enterprise value of US$2.9 billion. The investment is being made as part of a strategy to support Warid Telecom's continued growth and enhance its market position. The purchase will be satisfied through SingTel's internal and/or external sources of funds.
Warid Telecom is part of the Abu Dhabi Group, led by HH Sheikh Nahayan Mabarak Al Nahayan, a senior member of the Emirate of Abu Dhabi's ruling family.
According to company sources, Warid Telecom look forward to the opportunities that this partnership will bring to it (Warid Telecom) and to the broader telecom sector in Pakistan. Apart from this, this latest investment in Warid Telecom will further strengthen SingTel's position as the leading force in the Asia Pacific mobile market. Including Warid Telecom, SingTel, together with its associated companies, will have a major presence in eight regional cellular markets with a total of more than 130 million subscribers.
SingTel's Group has already made substantial investments in markets with high growth potential in South Asia, such as India and Bangladesh. Warid Telecom in Pakistan is a natural fit. It is also an attractive business with strong brand recognition. The management of Warid Telecom has established an impressive operational track record, turning EBITDA-positive in only 17 months after its commercial launch.
Warid Telecom is providing one of the largest international roaming networks in Pakistan at over 125 destinations. This network has been established by entering into roaming agreements with 175 leading international mobile service operators around the world within a short span of two years. Warid Telecom is also unique in Pakistan Telecom sector by offering 'SMS Roaming' to its postpaid customers in these destinations; a very cost-effective alternative to regular voice & text roaming.
International GPRS roaming service has also been extended to 35 destinations with 45 operators around the globe which places Warid 2nd in the standings. Apart from terrestrial destinations, Warid also provides GSM coverage onboard cruise ships and ocean liners touring over various destinations including Mediterranean and Caribbean routes.
Warid Telecom CEO Hamid Farooq said, "Our vision is to provide best services to Warid Telecom's subscribers. We are committed to provide the most cost-effective and innovative value-added services to our esteemed subscribers. We are continuously adding untapped locations and international operators to our international roaming network".
Asma Khan, Deputy General Manager International Business, said, "The valued subscribers of Warid Telecom services benefit from the international roaming facility at important global destinations. Our enormous IR network keeps our customer connected to their loved ones while they are traveling across the globe including Europe, United States, Far East, Middle East, South Asia, Central Asia, Asia Pacific and Africa."
According to Mr. Bashir Tahir, Chief Executive Officer of Warid Telecom International, SingTel has a reputation for making telecom investments where they can add value strategically, and where they work with management to help grow businesses. With SingTel's technological and commercial expertise, Warid Telecom will be well positioned to take on the challenges of the next phase of its development.
Warid Telecom which launched its services in May 2005 has sustained a very rapid expansion since. The company has a 15-year license to operate GSM-based mobile services in Pakistan, Azad Jammu and Kashmir, and the Northern areas.
Warid Telecom has achieved its current market position in Pakistan through a focus on customer service and innovation, and is recognized for its quality of service and strong brand image. The company has over the last six months more than doubled its investment in the expansion of its network and capacity in order to meet the rapidly growing demand for its services.
Warid Telecom is part of WTI, a telecommunications group set up in 2004 to acquire, own and operate telecom assets in the emerging markets of Asia and Africa. In addition to its operation in Pakistan, WTI successfully launched its operation in Bangladesh in May 2007 with half a million subscribers acquired in less than two months. Furthering its international expansion in its target markets, WTI has acquired licenses in Congo Brazzaville and Uganda and is preparing to launch its operations in these two markets in the second half of 2007. Through its subsidiary Wateen Telecom, the Group also operates a 5,000 km fiber optic backbone in Pakistan and is launching a Wimax service in addition to the Long Distance and International (LDI) service it offers today.
WTI is backed by the Abu Dhabi Group, one of the leading business groups in the United Arab Emirates, with interests in sectors including banking and financial services, hospitality, construction, telecommunications services, real estate and manufacturing. Led by His Highness Sheikh Nahayan Mabarak Al Nahayan the Abu Dhabi Group has been investing in Pakistan for many years and is today one of the largest foreign investors in the country. Apart from Warid Telecom in Pakistan, its other successful investments in the country include Bank Alfalah Limited, United Bank Limited, Taavun (Pvt.) Limited, Alfalah Insurance Company Limited, Alfalah GHP Investment Management, Alfalah Securities (Pvt) Ltd and Wateen Telecom (Pvt) Limited.
SingTel is Asia's leading communications group with operations and investments around the world. Serving both the corporate and consumer markets, it is committed to bringing the best of global communications to customers in the Asia Pacific and beyond. With significant operations in Singapore and Australia (through wholly-owned subsidiary SingTel Optus), the Group provides a comprehensive portfolio of services that include voice and data services over fixed, wireless and Internet platforms.
To serve the needs of multi-national corporations, SingTel has a network of 37 offices in 19 countries and territories throughout Asia Pacific, Europe and the United States. These offices enable SingTel to deliver reliable and quality network solutions to its customers, either on its own or jointly with local partners.
The Group also has major investments in Bangladesh, India, Indonesia, the Philippines and Thailand. Including Warid Telecom, SingTel, together with its associated companies, will have a major presence in eight regional cellular markets with a total of more than 130 million customers. SingTel employs more than 19,000 people worldwide and had a turnover of S$13.15 billion (US$8.40 billion) and net profit after tax of S$3.78 billion (US$2.42 billion) for the year ended 31 March 2007.