Jazz Sells 10,500 Towers to Engro in $563M Deal: A Game Changer for Pakistan’s Telecom Industry
The Competition Commission of Pakistan (CCP) has given the green light to Engro Corporation’s acquisition of Deodar (Pvt.) Ltd., the tower infrastructure subsidiary of Pakistan Mobile Communications Limited (Jazz). The deal, valued at approximately $563 million, marks a significant shift in Pakistan’s telecom landscape. This deal will allow Jazz to transition towards an asset-light business model while positioning Engro as a dominant player in the telecom infrastructure sector.
Jazz Sells 10,500 Towers to Engro in $563M Deal: A Game Changer for Pakistan’s Telecom Industry
Jazz, which is owned by the global telecom group Veon, has been looking to sell its tower assets for some time. Previously, it attempted to finalize deals with Edotco and the TPL-TASC consortium, but both transactions fell through. Rising energy costs, declining profit margins, and a growing focus on digital services have made it increasingly difficult for telecom operators to maintain and operate their own tower infrastructure. By offloading its towers, Jazz aims to streamline its operations and focus more on its core services, such as mobile connectivity and digital financial solutions.
Engro’s Expansion in Telecom Infrastructure
Engro Enfrashare, a subsidiary of Engro Connect, will manage the acquisition. Engro Enfrashare already operates a portfolio of 4,250 towers, and with the addition of Deodar’s 10,500 towers, its total portfolio will exceed 14,750 towers. This will make Engro the largest independent telecom tower company in Pakistan, with a market share surpassing 53%. The move will also improve network efficiency by promoting tower sharing among multiple telecom operators, reducing costs, and enhancing service quality.
With the increasing demand for 4G and upcoming 5G services, the role of independent tower companies has become more critical. By consolidating tower assets under a neutral infrastructure provider, telecom operators can also focus on expanding their coverage and investing in new technologies without the burden of managing physical assets.
Financial Aspects of the Deal
The transaction’s financial structure includes the transfer of Deodar’s existing $375 million debt liability to Engro, along with an additional investment of $187.7 million in fresh capital. Engro also plans to finance the acquisition through a combination of 67% debt and 33% equity, leveraging its financial strength and strategic partnerships.
One of the key advantages of this deal is its financial feasibility. Unlike Jazz’s previous attempts to sell its tower business, this transaction is unlikely to face significant regulatory hurdles. The State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR) are not expected to impose major restrictions since a large portion of the deal involves debt restructuring rather than direct capital outflows.
Future Implications
With the CCP officially approving the Scheme of Arrangement, Engro Connect will take control of Deodar (Pvt.) Ltd. from PMCL. This transaction signals a broader trend in the telecom sector, where operators are increasingly moving towards shared infrastructure models to optimize costs and improve service quality.
For Jazz, the deal provides a much-needed financial cushion and an opportunity to focus on its digital transformation goals. For Engro, this acquisition strengthens its footprint in the telecom sector, making it a key player in the country’s connectivity and digital infrastructure landscape.
See Also: Jazz and Engro Connect Partner to Strengthen Pakistan’s Digital Infrastructure
