LONDON, Feb 10: Pakistan is close to sealing its biggest privatization to date, with its state-controlled telecoms company set to transfer to Middle East-based buyer Etisalat very soon, the country’s telecoms minister said.

Awais Ahmed Khan Leghari said minor issues such as a voluntary redundancy scheme for employees and some property titles were holding up the $2.6 billion privatization of Pakistan Telecommunication Company Ltd (PTCL).

“The PTCL management is all ready for the transition. I usually tend to stay away from giving any particular time frame. But it should be soon,” Mr Leghari told Reuters in an interview on Friday.

The sale of a 26 per cent stake along with management control of Pakistan’s largest telecoms company ran into trouble last year after bidder Emirates Telecommunications (Etisalat) did not meet payment deadlines after originally offering to pay $2.6 billion.

But the two sides agreed last December to a deal under which Etisalat, a UAE monopoly, will pay Pakistan $1.4 billion up front, and the rest will be spread over a five year period.

Etisalat’s offer may have helped reinforce a perception that Gulf Arab firms were willing to pay dearly in their hunt for opportunities to invest soaring oil revenues. One reason for the price though may have been the explosive growth in Pakistan’s mobile market, much like larger neighbour India.

Pakistan’s mobile industry has seen subscriber numbers rise to nearly 20 million from just two million in the last 18 months and Mr Leghari said it was adding some 1.25 million subscribers each month.

Pakistan had seen telecoms penetration grow to 18 per cent from 4.5 per cent in just two years, and Mr Leghari said he expected it to rise to 35-40 per cent in another two years, with another 30 million users expected to be added in 24 months.

“The economy is growing. We had the third year of seven-plus per cent GDP growth. This is increasing the middle class ... On the other hand competition is bringing services into the reach of people with less income,” said the minister.

“So there is positive pressure from both angles. I think 35-40 per cent penetration should not be a problem.”

Pakistan has no plans to issue any more new mobile licences and Mr Leghari said licences in the future for third generation mobile services would be offered to existing players.

Egypt’s Orascom, Norway’s Telenor, Luxembourg-based Millicom International and UAE’s Warid Telecom are among the six GSM mobile operators in Pakistan.

“I don’t see any more players coming to the market or us wanting more players into the market,” said Mr Leghari, adding that there was already cut-throat competition between operators and scope for market consolidation.

“We keep encouraging them not to spill any blood in the process,” he added.—Reuters