KARACHI: Engro Corporation, Pakistan’s largest conglomerate, is set to expand its telecom tower-sharing operations through a strategic partnership with Veon, targeting enhanced coverage in Pakistan and exploring new telecom infrastructure applications.
“Pakistan is a massive and growing telecom market,” said Samad Dawood, vice chairman of Dawood Hercules Corp, which owns 40% of Engro Corp. “This infrastructure business enables us to optimize telecom assets in Pakistan and potentially expand to international markets,” he told Reuters, identifying regions from Morocco to Central Asia as potential targets.
Strategic Tower-Sharing Partnership
Engro and Veon, a Dutch telecom and digital services company, announced plans to pool and manage their telecom infrastructure in Pakistan. Their collaboration will not only expand tower-sharing capabilities for other operators but also explore innovative use cases, such as electric vehicle charging stations and drone landing platforms.
Under the deal, Engro will pay Jazz, Veon’s digital operator in Pakistan, $188 million and guarantee repayment of Deodar’s intercompany debt of $375 million. Deodar currently manages 10,500 towers in Pakistan, while Engro’s subsidiary, Engro Enfrashare, operates 4,063 towers, according to Topline Securities.
Economic Context and Opportunity
Dawood highlighted that recent economic measures in Pakistan have facilitated this significant transaction, one of the largest in local currency terms for Engro. Pakistan’s efforts to stabilize its economy through tough reforms and IMF-backed programs have been instrumental.
“The actions taken over the past quarters, combined with falling interest rates and inflation, have created a conducive environment for investment,” said Dawood. In November, Pakistan reduced its interest rate to 15% from a record high of 22%, while inflation dropped to 4.9%, a significant decline from nearly 40% earlier in 2023.
Positive Outlook for Investment
Dawood expressed optimism about Pakistan’s prospects, citing the IMF’s seal of approval as a confidence booster for foreign investors. “Macroeconomic stability and the ongoing IMF program have positioned Pakistan as an investable market, attracting international attention,” he said.
The partnership reflects Engro’s vision to restructure and capitalize on broader economic opportunities while navigating the challenges of Pakistan’s evolving macroeconomic landscape.
