Mobilink’s parent company sells Tunisian stake to repay debt

Mobilink not concerned about Orascom's deal to sell LINKdotNET and Link Egypt.

KARACHI: Mobilink’s parent company Orascom – the largest telecom operator in the Middle East – has just sold its Tunisian stake to help repay the debt, according to Reuters, but its Pakistani subsidiary, Mobilink, is unconcerned about the deal.

Interestingly, Qtel – the Qatar-based company which bought a stake in Orascom’s Tunisian operations – owns Wi-Tribe, Pakistan’s second largest WiMAX broadband operator.

Orascom Telecom Holding (OTH) sold its internet services arm LINKdotNET and Link Egypt to Qtel in July. Furthermore, the Financial Times and Business Week had reported that Africa’s largest mobile-phone operator, the MTN Group, was preparing to buy Orascom’s operations in Egypt, Algeria, Zimbabwe and Tunisia.

Analysts are unsure about how much of a dent this has made in the company’s debts and are uncertain if the company might need to sell its stake in its other subsidiaries.

Sources in Mobilink, however, said that they are unconcerned about the deal. They pointed out that Mobilink was Orascom’s most profitable subsidiary and mentioned that Mobilink was Pakistan’s only profitable mobile operator in the sense that its fixed costs had been covered by its operations at this point. They said that nothing indicated that Mobilink would suffer the same fate as any of Orascom’s other holdings.

Market observers speculated that the deal might even be in Mobilink’s favour since the move could allow the company to concentrate more on Pakistan. The company is the country’s largest mobile service provider and showed the largest gain in users in fiscal year 2010, according to the PTA’s annual report.

Observers also pointed out that earlier in May, Orascom had bought $140 million of Mobilink’s debt. A telecom analyst at EFG-Hermes, Marise Ananian, had said, “We believe that buying back those debts is generally positive news for Orascom Telecom as the Pakistani subsidiary was already highly leveraged.”

When contacted, Mobilink’s spokesperson said that he will be unable to comment on behalf of the parent company. The spokesperson, Omar Manzoor, added that Orascom’s public relations would be able to better comment on the situation.

However, no one at Orascom’s office could be reached by phone. Manal Abdel Hamid, the company’s head of communications, had not replied to the email till the filing of the report.

Published in The Express Tribune, December 9^th, 2010.