Pakistan’s largest conglomerate, Engro Corp, is expanding its telecom tower-sharing coverage through a strategic partnership with Veon. The companies aim to improve telecom infrastructure utilization in Pakistan and explore additional use cases such as electronic vehicle charging and drone landing.
Samad Dawood, vice chairman of Dawood Hercules Corp (which owns 40% of Engro Corp), highlighted the massive growth potential of Pakistan’s telecom market. “Pakistan is a very large market in terms of telecom, which keeps growing larger,” he told Reuters. Dawood added that this scale allows Engro to better leverage telecom infrastructure and eventually extend services to international markets, spanning from Morocco’s Atlantic coast to Central Asian nations.
In an announcement last week, Engro and Veon’s Dutch telecom and digital services company revealed plans to pool and manage their telecom infrastructure assets in Pakistan. The partnership aims to expand tower-sharing coverage to other operators. The companies are also considering additional use cases for the telecom infrastructure, such as establishing electronic vehicle charging stations and drone landing pads.
As part of the agreement, Engro will pay Jazz (Veon’s digital operator in Pakistan) $188 million and will guarantee the repayment of Deodar’s intercompany debt, amounting to $375 million. This deal is subject to corporate and regulatory approvals.
Currently, Veon’s Deodar operates 10,500 towers across Pakistan, while Engro, through Engro Enfrashare, manages 4,063 towers, according to Topline Securities. Engro’s restructuring efforts, which were previously aimed at navigating a challenging macroeconomic environment, have helped the company tap into broader economic opportunities.
Pakistan’s recovery path remains difficult after completing a $3 billion IMF bailout in April, but Engro’s deal is now seen as a sign of improving conditions. Dawood noted that recent economic actions, including falling interest rates and inflation, have created a more favorable environment for foreign investments. Pakistan slashed interest rates to 15% in November from a peak of 22% earlier this year. Inflation has dropped to 4.9% in November, down from nearly 40% in 2023.
“The incoming macro stability and the IMF’s seal of approval have a huge impact on foreign financiers looking at Pakistan as an investable market,” said Dawood, underscoring the importance of these positive developments.
