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Dark shadows loom large over Etisalat-PTCL deal

DUBAI — Dark shadows loom large over $2.598 billion telecom deal between Emirates Telecommunications Corporation and Pakistan Telecommunication Company Limited (PTCL) as the extended deadline expired yesterday with no official words from both sides.

Both the contracting parties — Government of Pakistan and Etisalat, kept mum about the future of the mega telecom deal and shy to face the Press in this regard.

The deal is already delayed over two-month due to some issues, which surfaced in late August following Etisalat's request to give additional time for final payment in $2.598 billion deal. Later, both the parties agreed to extend the completion period until October 28, 2005 to sort out the issues.

According to sources, the UAE firm is seeking more time from Government of Pakistan to complete the transaction as it has yet to settle the issues with the Pakistani government.

Looming uncertainty is causing unrest among the investors and further delay would hit future privatisation process in Pakistan, which intends to privatise Pakistan State Oil and Pakistan Steel Mills Corporation by the end of this year in which the UAE and Middle East investors are also participating.

Etisalat last month confirmed that it has been negotiating with Pakistan government to resolve some serious issues that threaten to torpedo its $2.59 billion bid for a 26 per cent in state-run PTCL.

However, both Etisalat and Pakistan declined to comment on the nature of the disputes between the two parties.

According to analysts, UAE telecom firm feels it may have offered too much price in the deregulated environment of Pakistan's telecom industry and only due to this reason the company is trying to get some concessions and obligations from the Government of Pakistan for minimising its cost of buying the PTCL shares.

Etisalat was declared the highest bidder for the PTCL and it was required to make a 25 per cent down payment within 14 days and the remaining 75 per cent in 60 days. As such, full payment by Etisalat and the handing and taking over of PTCL should have been completed by August 28, 2005.