Telecoms, internet in Pakistan

Etisalat’s position becoming more and more untenable. Certainly some senior Etisalat executives have been fired, but this is a major corporation. They should either pay up or formally announce that it was all a mistake and back out.

-================================-

Pakistan says rift is because of Etisalat’s management issues
BY ISAAC JOHN

2 December 2005

DUBAI — Amid rumours that Pakistan Telecommunications Company Ltd (PTCL) — currently deadlocked in its negotiations with Etisalat to salvage a $2.6 billion sales deal for 26 per cent shares — is weighing the options of suing the UAE telecom operator, a high-ranking official said the crisis was due to management issues in the UAE company.

Pakistan’s Information Technology Minister Awais Leghari was quoted in an interview as saying: “There have been some differences after the recent sale but these have been not due to any discrepancies on the part of Pakistan Telecommunications Company Limited, but due to management issues in Etisalat.” Sources close to the negotiations said the talks between the two sides centre on demands from Etisalat for more time to settle.

In the UAE, an Etisalat spokesman declined to comment on this. Asked about rumours about PTCL’s move to sue Etisalat, he said he would not make any remarks on that too.

The Pakistan minister, expressing hope that the state-owned national telecom giant’s privatisation deal with Etisalat would be closed soon, said the Privatisation Commission was in contact with Etisalat and was working on ironing out the differences. He also said that in contacts thus far, Etisalat had not conveyed any differences based on any action by the PTCL management.

He said that Etisalat’s investment in PTCL was not just a business deal but represented the long-term relationship between Pakistan and the UAE.

Another Pakistani official was quoted in a news report as saying that Islamabad should consider trying to salvage the deal by softening some of the payment terms. “We have a history with the UAE. If we can work around our difficulties, a deal with Etisalat could be in our best interest,” he said. He said the present crisis could jeopardise the close ties Pakistan has built over the past three decades with the UAE.

Pakistan government’s deal with Etisalat to sell a 26 per cent stake with management rights in PTCL was hailed as the country’s largest privatisation bid. But Etisalat has since missed two deadlines to pay the outstanding 90 per cent owed, prompting Pakistan’s privatisation commission to begin proceedings to cancel the deal. Since then, Abdul Hafeez Shaikh, Pakistan’s privatisation minister, has flown to Dubai to meet senior UAE government officials in an effort to salvage the deal. Sources said the issues raised by Etisalat included deferred payment structure; ability to pledge the acquired shares; right to increase shareholding via a ‘call option’ for additional ‘A’ class shares; allowing dual listing of PTCL shares in UAE; management agreement; exemption from withholding tax; waiver of duties and taxes; customs duty waiver and ability to transfer acquired shares.

Looks like PTCL is getting its act together and diversifying connectivity. One hopes that the connection will provide transit facilities

———————————————————-

ISLAMABAD: Pakistan and Iran have decided to establish a working group to address any operational problems ahead of building an optic fiber link between the two countries within the next one year.

The two countries have also decided exchange expertise and technical know-how in the area of telecom training for which officials from the both countries would visit each other to view the status of training facilities and find ways to further coordination and cooperation.

The decision was taken during a meeting between Minister for Information Technology Awais Ahmad Khan Leghari and Iran’s deputy communication minister Kamal Mohamedpour who met the minister to brief him on the arrangements made by Iran to link up with Pakistan through an optic fiber to be laid via Gawadar. IT Sercteray Farrakh Qayyum, Member telecom Nooruddin Baqai and advisor to IT Minister, Dr Aamir Matin were also present.

The countries also decided to have several rounds of talks in the next few days to overcome any hurdles and build a consensus on the proposed optic fiber link route. The Iranian delegation is in Islamabad to attend the 10th session of the General Assembly of Asia Pacific Tele-community.

Awais told the Iranian minister Pakistan was already in the process of adding redundancy to its existing international connectivity through fiber optic cables as SEA ME WE 3 was so far the only optical fiber cable connecting Pakistan to the external world and was a single point of failure for country’s international communication, vulnerable to both natural causes and clandestine activity.

He said PTCL was the only provider of national optical fiber backbone network in the country and there was a need to have back-up arrangements to meet the redundancy, diversity and resilience needs.

He added that work on three domestic alternate backbones had already started and all the three domestic backbone networks were coming from private sector initiatives, involving 15000 Km fiber and investment of about US$ 400 million in maximum 18 months.

The minister also briefed the Irnaian [sic] deputy minister on the telecom training facilities being offered at the PTCL institute. The two countries also decided to share their experiences in this regard through exchange of expertise and technical resources.

Kamal Mohamedpour told Awais his country had completed arrangements on its part to set up optic fiber link with Pakistan via any route suiting Pakistan. He said his country was also keen to seek Pakistan’s help and technical assistance in setting up an ICT center in Tehran under the International Telecommunication Union.