LAHORE: Pakistan Mobile Communications Ltd (Mobilink) and Warid Telecom (Pvt) Ltd announced on Thursday their agreement to combine, in first telecommunication merger in Pakistan.

The merger — which will create a company with more than 45 million users — is expected to be completed in six months, subject to regulatory approval.

Mobilink CEO Jeffrey Hedberg and CFO Andrew Kemp will assume the same positions of the new entity, whose name has yet to be announced.

Mobilink is owned by Cairo, Egypt-based Global Telecom Holding (formerly Orascom Telecom Holding), which is 51.9pc-owned by Amsterdam, Netherlands-based VimpelCom Ltd.

Warid is owned by Dhabi Group, which also owns Bank Alfalah Ltd.

The new company’s board will have six directors from the VimpelCom and Global Telecom side and one from Dhabi Group, the statement added.

Speaking at a press conference, Mr Hedberg said that as part of the transaction, Mobilink would first acquire all of Warid’s shares. Warid will then get 15 per cent of the shares of the combined entity. “Both companies will continue operating with their existing pattern till the government and other authorities concerned approve the merger,” he said, and clarified: “It’s a merger and not acquisition of Warid by Mobilink.”

To a question about any possible lay-offs, Warid CEO Munir Farooqui said: “Everyone’s job at Warid is secured provided they perform well.” The company has 1,000 employees at present.

“Both operators together will ensure availability of high quality cellular services in the country,” he said.

Asked whether or not the franchises of both operators, especially of Warid, have been taken on board, Mr Farooqui replied in the affirmative. “All modalities will be finalised in the next six months and it will also be decided whether to retain the name of Warid or not.”

Mobilink has the largest user base in Pakistan with 35.1 million subscribers, while Warid has the lowest with 10.3 million.

Commenting on the agreement, VimpelCom CEO Jean-Yves Charlier said: “We are delighted to announce the agreement with the Dhabi Group shareholders today to combine our businesses in Pakistan. With the addition of Warid, we will serve more than 45 million customers.”

The transaction is expected to create capital and operating expenditure synergies of around $500 million, the statement said. The combined revenue of both the companies for the 12 months to September 2015 was $1.4 billion.

Dhabi Group Chairman Sheikh Nahyan Mubarak Al Nahyan said in a statement: “Warid’s partnership with Mobilink will create value for all stakeholders and pave the way for exceptional and cost-efficient telecommunication services for customers.”

Our Staff Reporter in Karachi adds: Franchise operators of the two companies are not worried over the fate of franchise units or job losses in the wake of the merger.

Franchisees in F.B. Area said the merger is unlikely to cause any problems as franchises are being operated by the investors.

“You better check the emerging job situation in customer care centres of these two companies where the staffers are on payroll of Mobilink and Warid,” a franchise operator said.

When asked about job security of Mobilink employees after merger with Warid, Director Corporate Communications Mobilink Omar Manzur said, “After necessary government approval, we will review integration plan with all relevant stakeholders giving employees’ welfare the importance it deserves.”

Mobilink has 350 franchises and 5,000 employees in Pakistan, he added.

Published in Dawn, November 27th, 2015