Mobilink, Warid Telecom announce merger

[Devil Soul]

Mobilink, Warid Telecom announce merger
DAWN.COM — UPDATED ABOUT AN HOUR AGO
It’s official – Pakistan’s telecom industry is about to witness a massive consolidation as the parent companies of Mobilink and Warid Telecom announced on Thursday that they had reached a merger agreement.

A joint press release issued by both companies says Mobilink will first acquire 100 per cent of Warid’s shares in consideration for the Dhabi Group (Warid’s parent company) shareholders acquiring approximately 15pc of Mobilink shares.

The merged entity will serve over 45 million mobile customers and will become the leading high-speed mobile network in Pakistan, claims the release.

The merger will create synergies worth $500m.

"The transaction is expected to close within six months from today, subject to obtaining approvals from the relevant authorities in Pakistan and the satisfaction of customary closing conditions," reads the press release.

Commenting on the agreement, Jean-Yves Charlier, Chief Executive Officer of VimpelCom, Mobilink's parent company, said:

"We are delighted to announce the agreement with the Dhabi Group shareholders today to combine our businesses in Pakistan. With the addition of Warid to our already strong customer base at Mobilink, we will serve more than 45 million customers and offer a best-in-class mobile and high-speed data network – a key factor in the digital enablement of Pakistan’s economy. This transaction follows a number of strategic milestones for the company, including our recent joint venture announcement with WIND and 3 Italia in Italy and the agreement to sell our operations in Zimbabwe. This is yet another important step in our journey to continue delivering on our strategy to transform VimpelCom and improve our competitive position in our operating markets."

The board of the merged company will consist of seven directors, of whom six will be nominated by VimpelCom and GTH (Mobilink) and one nominated by the Dhabi Group shareholders. Upon successful completion of the transaction, Mobilink’s CEO Jeffrey Hedberg will become the CEO of the combined business and Mobilink’s CFO Andrew Kemp will become the CFO of the combined function.

“Creating the largest operator in Pakistan is a significant milestone for Mobilink and Warid but also for Pakistan as a whole. Both parties bring their unique strengths to this merger. Warid, with its strong post-paid base and high quality 4G/LTE network will complement Mobilink’s position in the market,” Dhabi Group Chairman Sheikh Nahyan Mubarak al Nahyan said.

Executives from both companies will address media personnel to give out more details on the agreement later in the day.

 

[sparten]

So, basically Mobilink gets LTE without an auction.

Regulators should not approve.

 

[My-Analogous]

So, basically Mobilink gets LTE without an auction.

Regulators should not approve.

They must restricted the license to current Warid customer only

 

[RescueRanger]

Good move by Mobilink!

 

[Bouncer]

So, basically Mobilink gets LTE without an auction.

Regulators should not approve.

Not really. PTA will decide if the new (merged) company can offer 4G. But this probably won't be an issue, because a) normally spectrum auction rules do not bar this kind of thing after mergers/acquisitions. b) there is another spectrum auction coming up soon, so even if PTA objects to it now, Mobilink can go for 4G in the round two.

 

[sparten]

PTA has no jurisdiction here, it would be Competition Commission of Pakistan which would decide.
Warid-Mobilink merger/sale was being discussed for several years, then it stops as Warid does not participate in the auction and yet ends up with a 4G license and Mobilink does not even bid for one.

There is really something off here.

 

[Faiez]

It's probably a takeover, not exactly a merger....Mobilink is the major player in telecom while warid is much much smaller...Mobilink business is going great, warid not exactly great. This is Mobilink expanding their business, that's all.

 

[volatile]

Warid LTA is no where breach of PTA regulation .My friend who has worked in that project explained that waird already has bandwidth available in an existing contracts and basically this LTE is light version what they have done very smartly is used 2G spectrum band width and some how compressed 4G in that i know it sounds weird but Warid was able to do that ,total legit and to be honest quite smart as this merger was in news for the last 1 year only reason not being done was due to low rev stream of warid and mainly from data side.

 

[NP-complete]

good news. IT and telecom is one place where monopolies and oligopolies are more beneficial. just like microsoft and google worked without competition for years and the consumers were better off.

 

[Jazzbot]

Well played Mobilink.

They just placed bid for 3G in auction and didn't spent a penny at 4G. Warid got 4G LTE without spending any penny.

After this merger, Mobilink has all 3g, 4g and 4g LTE spectrums covered without spending a single additional penny.

good news. IT and telecom is one place where monopolies and oligopolies are more beneficial. just like microsoft and google worked without competition for years and the consumers were better off.

Mobilink used to f-ck its customers dry in early years, hope you remember those days. As per 2015 stats:

Mobilink: 35 million customers
Telenor: 33
Warid: 10

And after this merger:

Mobilink: 45 million
Telenor: 33

So Mobilink becomes are distant winner, Telenor will need a merger with either Zong / Ufone to compete against Mobilink, else a monopoly like situation in favor of Mobilink and customers are going to suffer badly.

Not to forget, Mobilink services and network data sucks.

 

[Musalman]

Based on the current status of both the companies the name of the new company will be Mobilieeed

 

[RazorMC]

good news. IT and telecom is one place where monopolies and oligopolies are more beneficial. just like microsoft and google worked without competition for years and the consumers were better off.

Monopolies never benefit anyone except the shareholders. There are almost no exceptions in this case. the IT industry that you talk of relies heavily on competition to provide you the latest hardware at affordable prices.

Example:
1- Without AMD, Intel would still be overcharging customers for the same P4 over and over by just tweaking the speeds.

2- Without Yahoo's bloated search, there would be no incentive to build Google.

3- Without Apple we wouldn't have the ultra-sleek ultrabooks that we see from other vendors today.

3- Without competing carriers, customers would be paying the earth for simple calls like Etisalat customers were forced to do before du Telecom arrived.

4- Microsoft may have small competition from other OS, but their market-share resulted in most consumers installing pirated copies of Windows (esp thanks to so many crackers like DAZ team).

 

[Faiez]

Monopolies never benefit anyone except the shareholders. There are almost no exceptions in this case. the IT industry that you talk of relies heavily on competition to provide you the latest hardware at affordable prices.

There will always be oligopolies/monopolies in telecom industry in Pakistan as long as the gov. keeps its policy of auctioning radio licenses for money. These licenses should go for free for anyone wanting to setup a telecom business of any kind. Only then will you have proper free competition in this industry. It's always the gov. regulations that restrict competition.

 

[RazorMC]

There will always be oligopolies/monopolies in telecom industry in Pakistan as long as the gov. keeps its policy of auctioning radio licenses for money. These licenses should go for free for anyone wanting to setup a telecom business of any kind. Only then will you have proper free competition in this industry. It's always the gov. regulations that restrict competition.

Auctioning off the licenses ensures that the telecom operator has the funds necessary to offer those services and setup the necessary infrastructure. If every Tom, Dick and Harry got hold of the limited spectrum without the ability to utilize it, then the end-users will be the biggest losers.

Govt regulation maintains fair play for everyone involved, but it has the tendency to be misused.

 

[Faiez]

Auctioning off the licenses ensures that the telecom operator has the funds necessary to offer those services and setup the necessary infrastructure. If every Tom, Dick and Harry got hold of the limited spectrum without the ability to utilize it, then the end-users will be the biggest losers.

Govt regulation maintains fair play for everyone involved, but it has the tendency to be misused.

Not really. Make it a 1st come 1st serve basis and licenses to be for small geographical divisions such as towns and even blocks within towns. You will have alot of competition, amongst what you call tom dick harry. The non-competitive ones will go bust or merge with others. Process will keep repeating till it reaches dynmic equilibrium which depends on many external factors such as interest rates, technology (which might determine min. efficient scale) etc etc.

Govt regulation does not maintain fair play. And it does not have a tendency to be misused, it is made to be used by those in power to benefit themselves in many ways (not just monetary ways).