China Mobile Communications Corporation has struck a deal with Millicom International Cellular SA under which the company would by 88.86% shares of Paktel limited, Pakistan’s fifth largest mobile phone company. I am quoting from the report published in Finance Asia:
China Mobile Communications is making its first cross-border acquisition, buying Paktel in Pakistan at an enterprise value of $460 million. It will pay Millicom of Sweden - which owns 88.86% of Paktel – a cash consideration of $284 million. The deal has been concluded in almost record time since Millicom announced it in November last year.
China Mobile Communications owns 75% of NYSE and HK-listed China Mobile. China is the world’s largest cell phone market measured in terms of number of users and China Mobile is at the forefront of that revolution with the world’s largest mobile subscriber base. It provides mobile telecommunications and related services in 31 provinces in mainland China.
Paktel was established in 1990, this company first obtained the license to provide mobile phone service in Pakistan. At present, it’s subscribers are estimated to be 1.5 million but it has the capacity to provide phone services to more than 2 million people. China Mobile Communications is the largest mobile phone operator in the world. This is the first entrance of any Chinese mobile company in the Pakistani market. Beijing is encouraging its leading business organizations to expand their businesses. As a result, China Mobile is expanding its operations and Paktel is its first successful acquisition.
Pakistan’s mobile market is highly competitive. Last year, the number of mobile phone users was amounted to 46 million but it is only 30% of the total population. There is still room for growth.
Because of cheap rate of service and mobile phone sets, more and more people are now using mobile phones. Most of the South Asian countries have large number of people which makes them a very attractive market for mobile operators. Till now, China mobile was operating inside China. Now it is expanding its business. Let’s hope that they succeed in their efforts.
Related articles:
Asia Times
ZD Net Asia
Finance Asia
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