Competition Commission of Pakistan (CCP) has granted approval for Engro Corporation’s acquisition of Deodar (Pvt.) Ltd., the tower infrastructure subsidiary of Jazz. The $563 million deal marks a transformative shift in the country’s telecom sector, allowing Jazz to move towards an asset-light business model while solidifying Engro’s position as a major telecom infrastructure player.
For Jazz, owned by global telecom giant Veon, the sale of its tower assets has been a long-standing objective. Previous negotiations with Edotco and the TPL-TASC consortium collapsed before reaching completion. Several factors have driven the decision to offload its tower business, including rising energy costs, shrinking profit margins, and the increasing demand for digital services. Maintaining and operating its own tower infrastructure has become less viable, prompting the company to focus on its core business areas, such as mobile connectivity and digital financial solutions. By selling its towers to Engro, Jazz can streamline operations and improve financial efficiency.
Engro’s expansion into telecom infrastructure through its subsidiary, Engro Enfrashare, is a strategic move that aligns with global industry trends. Engro Enfrashare currently operates 4,250 towers, and with the addition of 10,500 towers from Deodar, its total portfolio will exceed 14,750 towers. This acquisition will establish Engro as Pakistan’s largest independent telecom tower company, surpassing a market share of 53%. The consolidation of tower assets under an independent operator is expected to improve network efficiency, encourage tower sharing among telecom operators, lower operational costs, and enhance service quality.
The growing demand for 4G services and the anticipated launch of 5G make the role of independent tower companies more crucial than ever. Telecom operators benefit from this model by shifting their focus toward expanding coverage and investing in new technologies rather than managing physical assets. The Engro-Jazz deal reflects a global trend where telecom companies are transitioning away from infrastructure ownership to improve cost efficiency and service delivery.
Financially, the transaction involves the transfer of Deodar’s existing $375 million debt liability to Engro, alongside an additional investment of $187.7 million in fresh capital. Engro plans to finance the acquisition through a mix of 67% debt and 33% equity, leveraging its financial strength and strategic partnerships to make the deal viable. Compared to previous attempts by Jazz to sell its tower business, this transaction is expected to face fewer regulatory challenges. SBP and FBR are unlikely to impose major restrictions, as much of the deal revolves around debt restructuring rather than a significant capital outflow.
With the CCP approving the Scheme of Arrangement, Engro Connect is set to assume control of Deodar (Pvt.) Ltd. from PMCL, marking a significant milestone in Pakistan’s telecom industry. This deal represents a broader shift towards shared infrastructure models, allowing telecom operators to optimize costs while enhancing service delivery. Jazz will benefit from the financial flexibility to advance its digital transformation goals, while Engro strengthens its presence in the connectivity and digital infrastructure sector. The acquisition is not just a business transaction but a strategic step that will shape the future of telecom services in Pakistan.
