PTCL loans mobile unit PKR11 billion for network investment

30 Nov 2011

Pakistan Telecommunication Company Limited (PTCL) has reportedly injected PKR11 billion (USD182.6 million) in its mobile subsidiary, Pakistan Telecommunication Mobile Ltd (PTML), The Nation reports. It is understood that the funds will predominantly be utilised for the development of the cellco’s network infrastructure, as well as to bolster marketing efforts. The money has been lent to the subsidiary under a debt agreement, the report claims, with these loans due to be paid back to the parent company in eight equal quarterly instalments, which will begin after a grace period of between three to four years. Commenting on the development, an unnamed PTML official said that the mobile operator had sought the financial aid after expense had increased on the back of high operational costs, noting: ‘[PTML’s] expansion plans need financial assistance on a long-term basis in order to scale up its services in the future, hence it has been aided by its parent company, which has a strong liquidity position.’

According to TeleGeography’s GlobalComms Database, PTML, which offers its services under the ‘Ufone’ banner, was Pakistan’s third largest cellular operator at end-June 2011, but in recent months it has lost ground against second-placed player Telenor Pakistan, while also ceding ground to up and coming cellco’s such as CMPak (Zong). At the end of the first half of 2011 PTML recorded a total subscriber base of 20.53 million, representing year-on-year growth of just over 7% and a market share of 18.8%. The cellco’s market share, however, was down from 19.4% at the end of H1 2010.