Telenor CEO Highlights Business Challenges in Pakistan

Telenor’s Norwegian CEO, Sigve Brekke, has shed light on the challenging business landscape in Pakistan, citing it as a key factor in the company’s decision to withdraw from the market. In a recent interview, Brekke emphasized the hurdles associated with repatriating profits as a significant concern influencing investor sentiments and strategic decisions. This contrasts with Telenor’s experience in Bangladesh, where the company has been able to successfully repatriate dividends. Over the past two decades, Telenor has made significant investments in various countries including Pakistan, India, Bangladesh, and Myanmar.

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Telenor’s trajectory across various markets reflects a dynamic response to changing circumstances. While it merged its business in India with Airtel and sold its operations in Myanmar due to evolving conditions, it has chosen to maintain its presence in Bangladesh. The decision to exit Pakistan was influenced by challenges in the business environment, particularly concerning profit repatriation.

Brekke emphasized the significance of this factor, indicating that investors may eventually withdraw from markets where repatriation is restricted. However, the situation in Bangladesh contrasts with Pakistan, as Telenor continues to successfully repatriate dividends from its operations there, reaffirming its commitment to the market.

Brekke clarified that speculations regarding Grameenphone‘s merger or Telenor’s departure from Bangladesh are unfounded. He attributed the decisions to exit certain markets or merge operations to strategic considerations related to anticipating data growth and market saturation.

In markets where Telenor has chosen to merge, such as Thailand and Malaysia, the company recognized the need to streamline operations amid increasing competition and limited market potential. These decisions were made in response to evolving consumer demands and industry dynamics, particularly during the initial phases of mobile phone adoption.

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Brekke explained that as mobile phone penetration reached saturation levels in certain markets, the focus shifted from acquiring new users to offering diverse services to existing customers. This necessitated strategic decisions, such as mergers, to consolidate market positions and enhance service offerings. By attaining a 50% market share through mergers in markets like Thailand, Malaysia, and Bangladesh, Telenor aimed to solidify its presence and better serve consumers.

However, in the case of Pakistan, achieving a similar market dominance was not feasible, leading to the decision to exit the market altogether