Telecom network operator Axiata has decided to buy 60.4 percent stake in Ncell, a mobile service provider in Nepal, from TeliaSonera for $1,030 million.
Axiata has more than 260 million customers in Malaysia, Indonesia, Sri Lanka, Bangladesh, Cambodia, India (Idea Cellular), Singapore and Pakistan. The deal valued at $1.365 billion will be giving Axiata presence in five key countries in South Asia.
Axiata has controlling stake in mobile operators in Celcom Malaysia, XL Indonesia, Dialog Sri Lanka, Robi Bangladesh and Smart Cambodia with significant strategic stakes in Idea Cellular India and M1 in Singapore. Axiata’s revenue for 2014 was RM18.7 billion.
Axiata revenue rose 7.6 percent quarter on quarter to RM5.1 billion in the third quarter of 2015.
Ncell has generated SEK 1,182 million or $138.17 million revenue in the July-September quarter of 2015, registering an increase of 10.1 percent — mainly driven by data business. Ncell had 11.46 million mobile subscribers in Nepal till September-end.
TeliaSonera strategies
Earlier, TeliaSonera decided to exit from the Euroasia region to focus more on lucrative business locations.
“In September we announced our ambition to reduce our presence in seven Eurasian markets and focus on operations in the Nordics and Baltics, within the strategy of creating the new TeliaSonera,” says Johan Dennelind, TeliaSonera’s President and CEO.
Deal details
TeliaSonera will sell its direct stake of 60.4 percent to Axiata for $1,030 million on cash and debt free basis.
This apart, TeliaSonera will dissolve its economic interests in the 20 percent local ownership and will receive approximately $48 million from Sunivera Capital Ventures. Niraj Shrestha will sell his shares to Bhavana Singh Shrestha, who is Axiata’s chosen local partner.
As part of the transaction, Visor will sell its 19.6 percent of Ncell to Axiata.
The divestment, all transactions included, results in a positive net cash effect of approximately SEK 7.5 billion after provisions, primarily related to tax, to TeliaSonera. TeliaSonera will use the proceeds for debt reduction in line with TeliaSonera’s ambition to keep a solid investment grade credit rating of A- to BBB+.
Morrison & Foerster is advising Malaysia-based Axiata Group for the acquisition of Ncell. Its Singapore partner Jake Robson has managed the deal.
Morrison & Foerster says Nepal has a mobile customer penetration of 51 percent. The country has experienced a mobile subscriber growth at an average of 18 percent over the last two years. Ncell is the number one telecom operator in Nepal, with a stronghold of close to 58 percent revenue market share and 49 percent subscriber market share.
Ncell network upgrade
In November, Ncell said it completed its network upgrade in the Kathmandu Valley, offering mobile data speeds of up to 21Mbps.
Ncell aims to double the voice and data traffic capacity, enhancing telecommunication quality and customer experience by making investment in network modernization works.
“With data speeds of up to 21Mbps, I am sure our customers will love to surf the internet, stream videos and connect with remote family and friends,” said Erim Taylanlar, CEO of Ncell.
Ncell has also added more towers to increase coverage. The new base stations have been built and constructed in compliance with regulations defined by Nepal Telecommunications Authority.
Baburajan K
[email protected]
