Etisalat confirms takeover within 2 weeks
ISLAMABAD, February 24 (-----------): Etisalat on Friday confirmed that all the stakeholders have reached agreement for the transfer of the PTCL management to the UAE operator within two weeks time.
Etisalat negotiators have closed the deal and all modalities have been hammered out that was hampering the deal since long, said an Etisalat official.
The official who has recently been hired by Etislata is among former top brass of PTCL, said that a number of former officials have been hired who will take charge of important assignments once the UAE operator takes over the Pak teleco.
A crowd of unnecessary officials, drawing millions, have been appointed in the PTCL on political basis who will be fired in March (after the formal takeover), he said while requesting anonymity.
On Feb 22, the Privatization Commission, in an official statement claimed that all issues have been settled down and the deal will be finalized within a fortnight.
The minister for privatization Dr Abdul Hafeez Sheikh, who is to join World Bank soon want to close the deal before his departure; also he wants to sell steel mills before leaving the job, said sources in the PC.
Sheikh recently said that the PTCL handing over to Etisalat would take one or two weeks. Justifying the time lag he said: “It is a very big deal --such deals take time.”
Etisalat's $2.6 billion takeover bid for PTCL, slackened by uncertainties, is finally seeing the light at the end of the tunnel with both sides reaching the final accord on transferring the management.
“The conclusion to more than six months of intense negotiations and bargains that has raised many questions about the conduct and efficiency of the Privatization Commission, and invited undue media attention,” said Zahid Arshad Shah, Chairman Global Economy Watch Pakistan.
The deal ran into rough waters after Etisalat failed to meet payment deadlines after offering to pay $2.6 billion on June 18, 2005. The deal came under heavy criticism as many believed it as heavily overpriced, surpassing the rivals -- China Mobile and SingTel.
The first installment of $260 million was paid in the same month and the rest of the payments were delayed repeatedly.
“The delays pushed Pakistan to succumb to ever-increasing demands of Etisalat for relaxations and some dangerous trends were set that could be detrimental for the future of privatization,” said Shah.
After some delays, the two sides agreed in Dec to amend the payment structure and keep the deal. According to the agreement, Etisalat will pay $1.14 billion up front, and the rest will be spread over a five-year period.
“Etisalat's decision to go-ahead with the deal despite mounting criticism that its bid was overpriced by $1 billion was prompted by the explosive growth in local mobile market. Local mobile subscribers surged to nearly 20 million from just two million in the past 18 months, adding some 1.25 million subscribers every month – which cannot be ignored by the UAE operator,” Shah opined.
Telecoms penetration grew to 18 percent from 4.5 percent in two years, and it is projected to rise 35-40 percent in another two years, with another 30 million users expected to be added in 24 months
ISLAMABAD, February 24 (-----------): Etisalat on Friday confirmed that all the stakeholders have reached agreement for the transfer of the PTCL management to the UAE operator within two weeks time.
Etisalat negotiators have closed the deal and all modalities have been hammered out that was hampering the deal since long, said an Etisalat official.
The official who has recently been hired by Etislata is among former top brass of PTCL, said that a number of former officials have been hired who will take charge of important assignments once the UAE operator takes over the Pak teleco.
A crowd of unnecessary officials, drawing millions, have been appointed in the PTCL on political basis who will be fired in March (after the formal takeover), he said while requesting anonymity.
On Feb 22, the Privatization Commission, in an official statement claimed that all issues have been settled down and the deal will be finalized within a fortnight.
The minister for privatization Dr Abdul Hafeez Sheikh, who is to join World Bank soon want to close the deal before his departure; also he wants to sell steel mills before leaving the job, said sources in the PC.
Sheikh recently said that the PTCL handing over to Etisalat would take one or two weeks. Justifying the time lag he said: “It is a very big deal --such deals take time.”
Etisalat's $2.6 billion takeover bid for PTCL, slackened by uncertainties, is finally seeing the light at the end of the tunnel with both sides reaching the final accord on transferring the management.
“The conclusion to more than six months of intense negotiations and bargains that has raised many questions about the conduct and efficiency of the Privatization Commission, and invited undue media attention,” said Zahid Arshad Shah, Chairman Global Economy Watch Pakistan.
The deal ran into rough waters after Etisalat failed to meet payment deadlines after offering to pay $2.6 billion on June 18, 2005. The deal came under heavy criticism as many believed it as heavily overpriced, surpassing the rivals -- China Mobile and SingTel.
The first installment of $260 million was paid in the same month and the rest of the payments were delayed repeatedly.
“The delays pushed Pakistan to succumb to ever-increasing demands of Etisalat for relaxations and some dangerous trends were set that could be detrimental for the future of privatization,” said Shah.
After some delays, the two sides agreed in Dec to amend the payment structure and keep the deal. According to the agreement, Etisalat will pay $1.14 billion up front, and the rest will be spread over a five-year period.
“Etisalat's decision to go-ahead with the deal despite mounting criticism that its bid was overpriced by $1 billion was prompted by the explosive growth in local mobile market. Local mobile subscribers surged to nearly 20 million from just two million in the past 18 months, adding some 1.25 million subscribers every month – which cannot be ignored by the UAE operator,” Shah opined.
Telecoms penetration grew to 18 percent from 4.5 percent in two years, and it is projected to rise 35-40 percent in another two years, with another 30 million users expected to be added in 24 months
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