Etisalat holds up PTCL payments

Etisalat is reported to be withholding around US$1 billion in payments to the Pakistan government over a dispute relating to its 2006 purchase of a 26 per cent stake in Pakistan Telecommunication Corporation (PTCL). The dispute is reported to be over the ownership of several properties in Pakistan that were part of the deal.

According to the terms of the agreement, Etisalat was due to pay US$1.4 billion within one month after the signing of the deal and the remaining amount of US$1.2 billion was to be paid in equal instalments over four and a half years, with one instalment every six months. The National newspaper reported that around US$1 billion of those payments are now up to a year overdue.

“Transfer of land is part of the contract. It says if it doesn’t happen we can stop the payments,” Etisalat’s chairman, Mohammed Omran told the newspaper. Omran declined to confirm the number of properties in dispute. “We have estimates but we don’t want to discuss specific numbers outside for contractual reasons,” he said. “I can tell you the properties are in main cities and very valuable.”

PTCL’s mobile subsidiary, Ufone ended Q3 2009 with around 19.1 million subscribers, representing a market share of around 20 per cent.