Coverage Comparison
A report published by Dawn has indicated that the UAE-based telecom group e& (formerly Etisalat) is assessing its exposure to Pakistan's telecom sector, potentially leading to an exit from Pakistan Telecommunication Company Ltd (PTCL), in which it holds management control. However, PTCL has responded by stating that its shareholders remain fully committed to the company's long-term strategy and that it is unaware of any change in their plans.
The initial report, dated April 30, cited background discussions with sources in the diplomatic and financial sectors, suggesting that e&'s plans are at a preliminary assessment stage, with no final decision taken. According to the report, the review is part of a broader portfolio optimisation exercise being undertaken by Gulf investors across multiple jurisdictions, not specific to Pakistan.
In a follow-up statement reported by Dawn on May 1, PTCL said its managing shareholder 'e&' remains closely engaged with the company, with a shared focus on delivering long-term value and advancing Pakistan's digital ecosystem. The company also noted that it was not aware of the sources referenced in the original report.
Key Claims
The original Dawn report, which carried no single byline, presented several claims sourced to unnamed officials and sources in the diplomatic and financial sectors:
- Portfolio review: e& is reviewing its exposure to Pakistan's telecom sector as part of broader capital allocation strategies, according to insiders cited by Dawn. The report notes this is part of a wider internal review by Gulf investors across multiple jurisdictions, not specific to Pakistan.
- UAE's Opec exit: As evidence of this broader review, the report points to the UAE's decision to quit the Opec bloc, describing it as part of a wider internal review rather than a country-specific move. The report also mentions the UAE's focus on hard-currency buffers and balance-of-payment stability.
- Pakistan's debt repayments: The report claims Pakistan repaid about $3.5bn to the UAE, which had been rolling over these deposits for years to shore up Pakistan's foreign exchange reserves under multiple IMF programmes. It also notes that Saudi Arabia has increased its deposits in Pakistan by $3bn to $8bn.
- PTCL's response: In response to the report, PTCL stated that its long-term business plan had recently been approved by its board and shareholders, and that it was not aware of any change in shareholders' plans. PTCL also highlighted strategic initiatives including the acquisition of Telenor Pakistan and Orion Towers, Ufone's 5G spectrum acquisition, and the continued expansion of its fibre network.
Perspectives
The two reports taken together offer contrasting perspectives:
- The original report's perspective: Based on unnamed sources, it suggests that e& is seriously considering reducing its exposure to Pakistan's telecom sector, driven by global macroeconomic uncertainty, regional geopolitical tensions, and evolving capital allocation strategies among sovereign-linked investors. It presents this as part of a broader trend affecting Gulf investments globally.
- PTCL's perspective: The company emphasizes that its managing shareholder remains closely engaged and committed to long-term value creation. It points to recent investments and strategic initiatives as evidence of this commitment, and states it has no knowledge of any change in shareholder plans.
- Context: The report also provides context on Pakistan's economic situation, noting recent repayments to the UAE and increased deposits from Saudi Arabia, which suggest shifting regional financial dynamics. However, these claims are sourced to the same unnamed insiders and have not been independently verified.