Telenor Pakistan decided to exit the market by selling its stakes to the Pakistan Telecommunication Company Limited (PTCL). The move has raised concerns about why telecom companies are leaving Pakistan. Telecom experts attribute this trend to the challenging business environment, regulatory issues, and government policies.
According to the experts, businesses cannot sustain themselves without profits, and when faced with challenges, companies may choose to leave. The article cites examples of other telecom companies, such as Warid, Qatar Telecom, and Oman Telecom, that exited the Pakistani market due to regulatory problems and the government’s reluctance to allocate frequencies.
Telenor Group’s Annual Report 2022 highlights regulatory risks in Pakistan, including arbitrary tax assessments and the unpredictable application of tax regulations. The Federal Board of Revenue froze Telenor Pakistan’s bank accounts over a disputed tax claim, leading to concerns about regulatory risk exposure. The company faced penalties and service disruptions, and its shares dropped due to impairment in its Pakistan operations.
The article notes that Telenor Group reported a heavy loss in Pakistan, attributing it to high business costs, energy costs, interest rate hikes, and dollar-denominated spectrum installments. The increase in Pakistan’s corporate income tax further added to the challenges. The Telenor Group expressed concerns about the deteriorating political and economic situation in Pakistan, highlighting risks of civil unrest, security concerns, and financial instability.
Despite efforts by Telenor Pakistan and other telecom companies to advocate for policy interventions to improve the industry’s health, the government has not addressed their warnings. Industry analysts view Telenor’s exit as a consequence of policy environment failure, emphasizing the need for immediate introspection to address the digital emergency in the country.
