Engro Corporation said on Wednesday it will enhance its total equity investment in the telecom infrastructure vertical to Rs21.5 billion.
According to a regulatory filing on the Pakistan Stock Exchange, the holding company will make this investment in its wholly-owned subsidiary Engro Connect, which will serve as a platform for the conglomerate’s initiatives in the telecommunications sector.
Speaking to Dawn, a company spokesperson said the latest equity injection is Rs14bn, which comes on top of the Rs7.5bn investment announced in April 2019.
E-Connect will hold complete ownership of Engro Enfrashare, which is the country’s largest independent telecom tower firm in terms of active towers.
A company statement said E-Enfrashare has over 1,800 operational sites with a base of 1,963 tenants and has framework agreements in place with all four mobile network operators (MNOs). “Engro envisages making E-Enfrashare a 5,000 BTS (build-to-suit) tower company by 2025,” it added.
The total equity injection of Rs21.5bn in E-Connect will mainly be utilised to expand the BTS tower business, including the provision of efficient energy solutions, network monitoring solutions and exploration of other investment avenues within the connectivity value chain, the statement said.
As per the most recent annual report, the conglomerate managed its telecom infrastructure vertical under an entity called Engro Infiniti, which owned two companies namely E-Enfrashare and Engro Digital.
The spokesperson said the new entity (E-Connect) will now own E-Enfrashare and manage all telecom infrastructure–related initiatives.
In contrast, E-Infiniti will remain the holding company for E-Digital and continue to “analyse potential opportunities inside and outside Pakistan” for ventures related to intellectual capital, data collection and analytics.
He said E-Enfrashare expands its tower network by either buying existing locations from telecom players or setting up new facilities. The BTS model aims at developing new, custom-built tower locations for lease after striking an agreement with an MNO (future tenant).
The company statement quoted Engro Corp CEO Ghias Khan as saying that the conglomerate will “utilise our considerable balance sheet and quality human capital to support our MNOs in their passive infrastructure requirements”.
The latest financial accounts of Engro Corp state the business outlook for E-Enfrashare is strong partly on the back of “stagnant revenue growth for MNOs,” which will provide the impetus for their cost optimisation initiatives such as tower sharing and co-location opportunities.
There are more than 100 million 3G/4G subscribers and the number is growing 28 per cent per annum.
In its quarterly results announced on August 24, Engro Corp reported net earnings of Rs14.3bn on a consolidated basis for April-June, up 46.4pc from a year ago.
The share price of Engro Corp registered a drop of 0.16pc to Rs295.50 on Wednesday.
Courtesy: Dawn