TeliaSonera quits nepal, Ncell sold to Malaysian Telco group Axiata for 1.03Bil USD
TeliaSonera, the parent company of Ncell – Nepal’s largest private cellular operator, has withdrawn its investments from Nepal. In an official press release from TeliaSonera, the company sold its 60.4 percent of the Ncell ownership to Axiata, one of the Asia’s largest telecommunication groups for USD 1.03 billion on cash and debt free basis (approx 1 kharb 40 arba in Nepalese Rupees).
It was on September 2015 that TeliaSonera announced their ambition to reduce their presence in several Eurasian markets.
Axiata, headquartered in Kuala Lumpur, Malaysia with its more than 260 million customers and 25 thousand employees, is operating in various Asian telecommunication assets in Malaysia, Indonesia, Sri Lanka, Bangladesh, Cambodia, India, Singapore and Pakistan, and now in Nepal.
On the other side, 20% local ownership share of Niraj Shrestha has been dissolved with Ncell/TeliaSonera and sold to another locally held Axiata’s partner MRs Bhavana Singh Shrestha (Sunivera Capital Venture Nepal.) Nepal’s current regulation for foreign companies to invest in Nepal requires 20 percent of the ownership in the company be held by a Nepali citizen.
As part of the transaction, Visor Capital (via SEA Telecom) will sell its 19.6 percent of Ncell to Axiata.
The transaction is subject to approvals and closing is expected in first half of 2016. The deal is subject to approval from Department of Industries in Nepal, Nepalese Telecom Authority, Malaysian Central Bank and Axiata’s shareholders, respectively.
Ncell claims to have a 56 percent share in the Nepali telecommunications market. The company has also been the largest tax payer (with NPR 11.3bil last FY alone) to the Nepal government for the last three consecutive years.
Ncell CEO, Erin Taylanlar, sent an official message to its business and corporate users today informing the company’s exit announcement and has promised the announcement will not affect Ncell’s operations and relationship with the valued customers. As promised, Ncell will fulfill its commitment to donate NPR 1 billion to nepal in the course of three years for earthquake relief, the newsletter says.
This buy-sell of Ncell has remained many questions unanswered both for Nepal’s local customer base and it’s expert 500 employees. As Axiata usually lax it’s branding free for the operating country’s company to determine unlike TeliaSonera which was attached to Xcell name, there are now speculuations whether the name Ncell will remain or will the company be renamed just like when Spice Nepal’s Mero Mobile became Ncell back in 2010.