March  2007

by Mashaal Gauhar

 

Mobilink's milestone of reaching 20 million customers exemplifies the telecom sector's status as one of Pakistan's most formidable growth engines. The exponential growth of this sector signifies a trend throughout the developing world. According to World Bank estimates, between 1993 and 2003 the private sector invested a staggering $230 billion in telecommunications infrastructure in the developing world. In this regard, Mobilink has invested over $2 billion in developing its network across Pakistan, generating employment for thousands.

 

`Reshaping lives' - revolutionizing the rural areas

 

The impact of Pakistan's telecom revolution on the economic and social life of the Pakistani populace is immense as mobile phones do not depend on a permanent electricity source — a major benefit particularly in the rural areas where electricity supplies are unreliable. Mobilink's network extends across more than 6,000 villages located in the interiors of Sindh and the Punjab and the Northern Areas.  As a result, trade networks have broadened and the need for traveling long distances has been reduced

 

Zouhair Khaliq, CEO of Mobilink Pakistan, elaborates on the implications of greater connectivity within Pakistan, particularly for rural subscribers. "People who never had the ability to make a phone call or own a phone are now able to do so. This changes the way they do business, it changes the way they lead their lives, it changes the way they relate to their business partners and their loved ones." 

 

From 2005 to 2006, Pakistan's telecom industry contributed around $1.3 billion in duties, taxes and royalties to the exchequer. Moreover, the rapid growth of this sector has opened up a broad swathe of employment opportunities ranging from engineering to marketing, effectively overhauling the employment landscape of the country.

 

The paradigm shift brought about by the telecom revolution cannot be underestimated as low income groups are able to participate in it too and enjoy its benefits. Unlike the once much vaunted idea that the elusive benefits of economic growth would `trickle down' to the masses, in the telecom sector, the benefits are direct and immediate. In the rural areas methods of doing business have been forever transformed, the once isolated rural dwellers are now connected with the rest of the country, helping to bridge the chasm between urban and rural and amply demonstrating Mobilink's apt assertion of `reshaping lives'.

 

Mobilink PCO – breaking new ground

 

In an effort to find innovative ways to serve low income groups in semi-urban and rural areas, Mobilink has launched the PCO self employment scheme. Under this scheme, an individual can buy a fixed wireless phone with a prepaid connection equipped with tariff posters, a pen, a calculator, a notepad and a Rs 600 scratch card and then generate an income by charging for calls. "It's business on the go," explains Zouhair. Anyone can buy it for as little as $100 and start business within the hour literally. There is nothing more to do when he or she has filled out all the regulatory requirements of getting a connection.  He can start this up outside his tea shop, or perhaps a widow can set it up outside her home."

 

The PCO programme will span across 1,200 cities, towns and villages, enabling access to communication in rural and underdeveloped areas of Pakistan. Projects like the PCO scheme illustrate how the telecom industry can help to recalibrate Pakistan's stark urban-rural imbalance as such projects not only allow connectivity but also provide a means of generating income for rural dwellers. "It has been said that if you give fish to a hungry man he will be hungry again tomorrow; but if you teach him how to fish, he will be able to feed his whole family for generations," said Zouhair at the launch of the PCO project.

 

Mobilink's $250 million bond offering — the first of its kind

 

Mobilink's international bond offering in November 2006 was the first unsecured borrowing ever by a Pakistani corporate. Attracting rapturous and unqualified praise at home and abroad, its unprecedented success has effectively burnished Pakistan's credentials as a rewarding investment destination. AsiaMoney Magazine hailed it as the `best high-yield deal of the year' while EuroWeek described it as `one of the most popular Asian issues of the year.'

 

Arranged by ABN AMRO and Deutsche Bank, Mobilink's bond issue was oversubscribed by 15 times. The success of this pioneering transaction will pave the way for other corporates to follow suit, infusing the Pakistan market with a fresh competitive zeal.

 

 

 

A rigorous road show spanning from Singapore to Los Angeles was arranged but due to the overwhelming investor response, the deal was accelerated and priced before the Los Angeles road show. The Notes which mature on November 13^th, 2013 and bear interest at the rate of 8.625% per annum will be callable at the beginning of November 2010 and include typical high yield bond covenants. The international bond will contribute towards the financing of Mobilink's continuing investment programme which is estimated at around $1 billion for 2006 to 2007.

 

Zouhair perceives it as a triumph not only for Mobilink but for the country as well. "What it showed was that a company which grew up in Pakistan, is run by Pakistanis and does business in Pakistan can generate that sort of interest and confidence in not only the company but also the country by implication because people knew exactly where we worked and I think it was a fantastic validation not only for the work we do at Mobilink but also for the government."

 

Corporate philanthropy — setting new standards

Under Zouhair Khaliq's leadership, Mobilink has established exacting standards of corporate social awareness and is undoubtedly one of Pakistan's most visible supporters of charitable causes and cultural events.  Over the years, Mobilink has done a great deal of work with charities and NGOs focused on health and education including The Shaukat Khanum Memorial Hospital, The Kidney Centre, the LRBT, The Citizens Foundation (TCF), Umeed-e-Noor and CARE.

 

In the wake of the earthquake that devastated Pakistan's northern areas a little over a year ago, Mobilink partnered with TCF and funded the rebuilding of an entire village. Since then, Mobilink has funded two TCF schools located in low income areas on the outskirts of Karachi and Lahore and has committed Rs 20 million to TCF for children's education. Mobilink has also provided the Aga Khan University Hospital, Karachi and the Pakistan Institute of Medical Sciences, Islamabad with equipment to help in diagnostic treatment.

 

The Mobilink ethos is exemplary in its support of diverse causes ranging from health, education and local heritage and culture. "We have a very rich and vibrant culture in Pakistan which is unfortunately sometimes ignored or not supported in the way that it should be. As a successful corporation, I think it is our duty to look at supporting local talent," says Zouhair. Mobilink has been the driving force behind some of the major national cultural events. It helped build the hugely successful Jazz Indus Music Awards which honours Pakistani artists and the Rafi Peer Theatre Puppet Show and will also be sponsoring this year's Kara Film Festival.

 

Mobilink has also contributed to the restoration of the ancient forts located at Rohtas and Lahore. In fact, Mobilink's spectacular 20 million celebrations were held at the Lahore Fort, illuminating the Fort in a way which had never been done before.

 

 

 

However, Mobilink's social responsibility initiatives extend to a far more personal level as a large number of Mobilink employees undertake regular volunteer work at old people's homes, a practice which they find to be immensely rewarding. This sets them apart from other corporates as Mobilink's acute social awareness is pervasive within all levels of the organization. "That's beyond any kind of dollar value to me," asserts Zouhair.

 

Going forward

 "We would like to continue to grow and become the vision that we set ourselves about four years ago which is to be the total telecom provider to the people of Pakistan and to be the most loved brand in Pakistan," says Zouhair. Acutely aware of Pakistan's ever-changing and highly competitive telecom market, Zouhair is optimistic about the Pakistan's favourable investment environment.  "Now obviously these are tremendous goals; they are very ambitious but I think we have very supportive shareholders. We have an extremely conducive corporate climate in Pakistan."

 

 

 

Having achieved such a great deal in Pakistan's still nascent telecom market, Zouhair credits his team for their outstanding performance. "I am very proud of the team that works at Mobilink. I think that they are by far, in the 25 years of my career, some of the best people I have worked with and I feel very privileged."

 

Acknowledged for the breadth and insight for its work within Pakistan, Mobilink emerges as the clear-cut market leader.

 

Mobilink, a part of the Orascom Telecom Group, is Pakistan's leading cellular service provider with more than 54% of the total market share. It has a customer base of more than 20 million members as of November 2006 and provides the most extensive coverage footprint across Pakistan with more than 1250 cities, towns, villages and countless destinations and true International Roaming in over 100 countries with more than 300 partner operators. Orascom Telecom, Mobilink's parent company, has grown to become a major player in the telecommunications market and is a leading mobile telecommunications company operating in seven markets in the Middle East, Africa and South Asia.