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In
the heart of Karachi's business district is a fast food
café whose walls are pasted with old newspapers. Every
time Shuja Rizvi walks past he is reminded of the years
of delay in privatising Pakistan's main telecom monopoly.
As senior
equity analyst at Karachi's Capital One brokerage house,
Mr Rizvi notes a story published in 1992 which predicted
the privatisation of Pakistan Telecommunication Company
(PTCL) later that year.
Thirteen years
later, PTCL - one of the largest public sector companies
and the exclusive provider of fixed telephone connections
- is closer to its privatisation this month, with senior
officials hoping to settle on a buyer from up to seven
contenders. "It's been a long delay, but it's finally
happening," says Mr Rizvi.
The company's
privatisation was held up, in part because of objections
from Pakistan's powerful defence forces, which wanted their
own communication network before the monopoly could be
sold.
Once the government
created a separate network for the defence services, plans
for privatisation were delayed for a mix of reasons, from
lacklustre investor interest driven by concerns over Pakistan's
internal security conditions, to worries over grim economic
prospects from the mid-1990s onwards.
Armed with
the confidence of an economic recovery now underway and
the privatisation programme showing signs of movement with
the successful sale of other companies, Pakistan is finally
seeking offers from prospective investors seeking 26 per
cent of PTCL's stock.
Although the
new investor will be buying only a minority stake, the
government will surrender all management control, finally
ending almost six decades of the public sector's unquestioned
dominance over Pakistan's telecom services. The Pakistani
government owns 88 per cent of PTCL's stock while the rest
has been sold to individual investors.
The prospective
investors lined up to present their final bids for PTCL
later this month include China Mobile Communications, China's
leading cellular operator, Singapore's Singtel, Etisalaat
of the United Arab Emirates, Telekom Malaysia, Riyadh-based
Saudi Oger, Turkcell of Turkey and Egypt's Al Mal consortium.
"We are
finally getting to the end of our journey on PTCL," says
Abdul Hafeez Shaikh, the privatisation minister. "It's
been a long road but its happening".
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