Through its strategic alliance with Veon, Engro, Pakistan’s largest conglomerate, plans to expand its telecom tower-sharing initiatives across Pakistan and explore new telecom infrastructure applications.
Samad Dawood, vice chairman of Dawood Hercules, which holds a 40% stake in Engro, emphasized the growth potential in Pakistan’s telecom sector to Reuters. “This sector continues to expand, offering significant opportunities to optimize telecom infrastructure domestically and internationally,” Dawood stated. He identified potential markets stretching from Morocco’s Atlantic coast to Central Asia.
Last week, Engro and Veon, a Dutch telecommunications and digital services company, declared their intention to combine and manage their infrastructure assets in Pakistan. Their plans include extending tower-sharing services to other operators and investigating additional uses like electric vehicle charging and drone landings.
As part of the agreement, Engro will pay $188 million to Veon’s digital operator in Pakistan, Jazz, and, pending corporate and regulatory approvals, will also take responsibility for $375 million of intercompany debt from Deodar.
Topline Securities reports that Deodar, a Veon subsidiary, currently manages 10,500 towers in Pakistan, while Engro’s subsidiary, Engro Enfrashare, operates 4,063 towers.
Earlier, Dawood cited a tough macroeconomic climate as a catalyst for restructuring within Engro, aiming to leverage broader economic opportunities. After completing a $3 billion IMF bailout in April, Pakistan embarked on a new $7 billion, 37-month bailout agreement in September to bolster macroeconomic stability.
Dawood noted recent changes have facilitated Engro’s largest transaction in Pakistani rupees.
Recently, Pakistan cut its interest rates to 15% from a peak of 22%. Inflation decreased to 4.9% in November from nearly 40% earlier in 2023. “The emerging macroeconomic stability and the IMF’s endorsement greatly enhance Pakistan’s appeal to foreign investors,” Dawood concluded.
