SingTel Confirms to Buy Warid Stake for $758 Million
Singapore Telecommunications, Southeast Asia's leading telecoms group, agreed to buy a 30% stake in Warid Telecom, Pakistan's No. 3 mobile operator, for $758 million.
SingTel, expanding into rapidly growing mobile markets outside its saturated home base, has often said it is interested in Pakistan, where Warid has nearly 10 million subscribers.
The deal gives Warid, which is owned by the private Abu Dhabi Group, an enterprise value of $2.9 billion, SingTel said in a statement late on Thursday. A source in the Pakistani company had said earlier that SingTel was set to buy the stake.
The 30% holding will consist of new and existing shares, in equal proportions, SingTel said. "SingTel has 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," SingTel Chief Executive Chua Sock Koong said in a statement.
Warid, which started operations in 2005, has about 17% of Pakistan's 58.4 million mobile subscribers as at end-April. Subscriber growth is rapid, having ballooned from only 12.8 million in 2005. Mobile penetration is now around 35%.
In SingTel's home market of just 4.5 million people, mobile penetration has reached more than 100%, forcing the company to expand abroad in search of growth and higher returns.
Singapore's biggest listed company, SingTel has spent S$17 billion (US$11.05 billion) in recent years buying operators in high-growth Asian nations and in the bigger Australian market.
Pakistan has a moratorium on the issue of new mobile operator licenses, so the only way international companies can enter the market is by buying stakes in existing players.
Industry sources said SingTel beat rivals MTN of South Africa and Britain's Vodafone for the Warid stake.
This year, China Mobile, the world's biggest wireless carrier, agreed to buy an 89% stake in loss-making Pakistan operator Paktel for $284 million for its first acquisition outside its home market.
Apart from Warid and Paktel, which is now known as CM PAK, Pakistan's other operators are Mobilink, now a 100 percent-owned subsidiary of Egypt-based Orascom Telecom, Norway's Telenor, Ufone, part of Pakistan Telecommunication, and private Instaphone.
Warid owner the Abu Dhabi Group is one of the largest foreign investor groups in Pakistan and also owns Bank Alfalah and Wateen Telecom. It also owns a stake in United Bank.