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Thu 28 Jan 2010 02:19 AM

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Etisalat to pay $800m for Pakistani stake - Minister

Increased competition at home has seen telecom operator seek overseas expansion.

Pakistan will receive a payment of $800 million by the end of March from the UAE's Etisalat for a stake in Pakistan Telecommunication Co (PTCL), Pakistan's Minister of Privatisation said on Wednesday.

In 2006, Etisalat, the Gulf Arab region's second largest telecom firm, signed an agreement to purchase a 26 percent stake in PTCL for $2.6 billon, but so far only $1.4 billion has been paid, due to problems linked with a transfer of 3,000 real estate units.

Under the contract, the government agreed to transfer the properties before Etisalat made the full payment.

In an interview with Reuters on Wednesday, Waqar Ahmed Khan, Minister of Privatisation, said: "We have agreed on a framework with Etisalat by which the transfer of $800 million will happen by the end of March ... the property issues will be resolved soon."

In December, Etisalat said the remaining $1.2 billion would be paid in equal instalments over a period of 4.5 years in consideration for "certain corresponding deliverables by the Pakistani counterpart."

Etisalat declined to comment on the agreement.

It remains unclear whether Pakistan has decided to give the telecom giant a discount. Khan declined to comment on the remaining $400 million.

Khan added: "We want to resolve all the issues with this deal and move on to privatising other companies and we just want this to be a good example to lead by in the future."

So far 93 percent of the land and properties under the contact had been transferred to Etisalat, Pakistan had said in December.

Etisalat has faced increased competition in its home market after its monopoly was broken in 2007 by Dubai based du.

Etisalat, operating in 18 countries, including Egypt and India, is one of a number of Gulf Arab telecom operators that have expanded overseas after losing their monopolies at home. (Reuters)

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