Veon Ltd. is in advanced talks to sell wireless towers in Pakistan to a unit of Axiata Group Bhd., the biggest Malaysian mobile operator, according to Bloomberg.
Axiata’s infrastructure arm, Edotco Group Sdn., plans to announce an agreement as soon as this week that could value the towers at about $1 billion, people familiar with the matter said. The purchase of about 13,000 towers will make Edotco the biggest independent telecommunications tower operator in the South Asian nation.
Veon confirmed the talks about the subsidiary, known as Deodar Ltd., in a statement Tuesday after Bloomberg reported on the plans. The discussions may not result in a transaction, according to the company’s statement.
Axiata has been pursuing overseas deals as it seeks to reduce reliance on a home market where it’s losing subscribers and average customer revenue is flattening. Any deal will add to the $3.1 billion of acquisitions announced in Pakistan over the past 12 months, according to data compiled by Bloomberg.
“The deal implies a price of about $70,000 per tower versus more than $100,000 in Italy, but that’s a great price for Pakistan where average revenue per user is substantially lower,” said Alexander Vengranovich, analyst at Otkritie Capital in Moscow. The Pakistan unit may use the proceeds to buy wireless spectrum, reduce debt and pay a dividend to its parent company, he said.
The acquisition would help Kuala Lumpur-based Axiata meet a goal of expanding its overseas infrastructure operations ahead of an eventual listing of the business. Axiata wants to increase its phone towers in Southeast Asia and South Asia to 26,000 from 16,000 within three years, Chief Executive Officer Jamaludin Ibrahim said in an interview last year.
Shares of Axiata have fallen 12 percent over the past year, giving the company a market value of $10.2 billion. A representative for Edotco said he couldn’t immediately comment.
August 30, 2017
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