Recent reports emerge as Zong, a leading telecom operator in Pakistan, is interested in buying Warid Telecom. Zong is now participating to bid for the Abu Dhabi Group’s telecom subsidiary in Pakistan for an enormous USD 1 billion deal.
Zong has also employed MAS ClearSight for consultation and buyout evaluation process of this mega deal.
Zong stands in the fourth place in Pakistan with almost 22 million subscribers. It will get a boost of another 12 million user base if it gets acquisition of Warid Telecom. This conglomerate will then be following only Mobilink, which is the top cellular operator with a 34 million user base.
Chief Public Relation Officer, Zong, Mr. Sikandar Naqi confirmed the intentions of Zong to take this bidding seriously. “We already have been given a green signal for this auction and we are anxiously waiting for its outcome,” he said.
UAE based Etisalat and Russia’s VimpelCom – the inventor firm of Mobilink, are also contesting along Zong for the Warid buyout.
Zong parent firm, China Mobile says it has almost over USD 70 billion cash in hand. Group is keen to stretch its telecom business in Pakistan as well as in other emerging markets.
In the current scenario, where it’s pretty tough to attract new customers due to strict SIM sales rules and mounting tele-density, Warid buyout might work quite well for China Mobile.
After proposed deployment of Biometric verification solution just around the corner, conditions for new sales might get worsen.
So, grabbing almost 12 million users for a $1 billion deal is a profitable business when 3G is likely to be launched soon.
Analysts are optimistic about a whooping 300 to 400 percent increase in ARPU after the 3G technology comes into play. It will offer impressive voice and data services. This means that any cellular firm with plenty of users at 2G platform will get huge loads of revenue when switching to the next level, which is 3G Spectrum.
Warid Telecom has got an excellent reputation among its customer base and is well-known for its strong network infrastructure.
If Zong gets successful in acquiring Warid Telecom, it will be able to get an LDI license without investing surplus cash for a fresh licence, for which it has been long trying.