It is challenging to do business in Pakistan, says Telenor CEO

Telenor's Norwegian CEO Sigve Brekke has said that the business environment in Pakistan poses significant challenges and that is one of the reasons behind the company's decision to exit the market. 

In a recent interview, Brekke highlighted the difficulties of repatriating profits as a critical factor influencing investor decisions to leave the country. However, he contrasted this with Telenor's situation in Bangladesh, where the company continues to repatriate dividends successfully.

In the past two decades, Telenor invested in Pakistan, India, Bangladesh, and Myanmar.

However, it merged its business in India with Airtel due to several reasons and sold its Myanmar unit after the military junta took over. It also merged its businesses in Thailand and Malaysia.

In December 2023, Telenor announced the sale of its Pakistan operations to Pakistan Telecommunication Company Limited (PTCL).

In contrast, the Telenor CEO said that the company has no plans to pull investment from Bangladesh or merge its Bangladesh unit Grameenphone with others.

“It's very challenging to do business in Pakistan right now. That's one of the reasons why we have decided to exit,” Brekke said.

“If an investor cannot repatriate profit from a country, then the investor probably will, over time, leave. But that's not the case for us in Bangladesh. We are taking out dividends,” he added. 

He said that speculations about Grameenphone’s merger or Telenor’s exit from Bangladesh are wrong.

“The reason why we have exited some markets and the reason why we have merged in some markets is that we saw that we need to be prepared for the data growth in these markets. And we saw that we cannot, there is not business enough for basically more than three operators. It was when people were lining up to get their first mobile phone.”

“Then it was enough growth for more than three players. But now that people have a mobile phone, you need to then be able to provide different types of services. And that's why we saw that in Malaysia and Thailand.”

“We merged so that we got the number one position in the market, 50% market position. That we now have in Thailand, that we now have in Malaysia and that we have in Bangladesh. In Pakistan that was not possible,” he further elaborated.