The Jazz IPO is finally coming. What does it mean for the PSX?

It is likely to be one of the biggest initial public offerings (IPOs) in the history of Pakistani capital markets, and certainly the most significant public listing since Habib Bank’s IPO in 2007: Pakistan Mobile Communications Ltd, the country’s largest telecommunications company and better known by their consumer-facing brand Jazz, is finally going public.

The news that Jazz is planning this IPO has been telegraphed clearly and publicly for weeks now, and some hints have been emanating from the company’s senior management for quite a few months before then. What makes it significant is that, while an IPO is typically a significant milestone in the history of a company, this particular IPO is likely a more significant development for Pakistan’s capital markets than it is for Jazz, the company ostensibly relying on those capital markets to raise funding.

In Pakistan, as in many frontier and emerging economies, many of the largest and most profitable businesses tend to be private, meaning that public market investors tend to not have the ability to invest in some of the most profitable and rapidly growing sectors of the economy.

Telecoms is one of the most prominent such sectors, because there has been strong growth in that sector, it is highly visible owing to its consumer-facing nature, and it is one of the largest and most important sectors in the economy, but until now, just one major telecom company – the state-owned Pakistan Telecommunications Ltd (PTCL) – has been publicly listed.

(Worldcall, a cable internet provider, is listed, and Wateen, an internet infrastructure company, was previously listed. While they are interesting companies, they are not of the same scale as the mobile telecommunications companies.)

Pakistan’s mobile network operator space has shrunk from five to three as a result of acquisitions. Warid was acquired by Jazz in November 2015, and Telenor Pakistan has been acquired by PTCL in December 2023. If this IPO goes through, we will enter a brave new world where two out of three mobile network operators will be publicly listed companies, with the only unlisted one being China Mobile Pakistan Ltd, known by its consumer brand name Zong.

This is, in more than one sense, a big deal.

In this story, we will take a look at the state of play in Pakistan’s mobile telecommunications industry and Jazz’s dominant role in it, the challenging unit economics of running a mobile provider in Pakistan, before looking at what this IPO will be.