Pakistani mobile operators Mobilink and Warid Telecom have reportedly agreed to merge to create an operator with a presence in both 3G and 4G.
Mobilink parent VimpelCom and Warid's major shareholder the Abu Dhabi Group have completed negotiation and due diligence on the deal and expect to be ready to announce it in January next year, the Daily Times reported, citing sources.
The acquisition is expected to be highly complementary for both companies. Warid launched LTE services in December last year, but currently does not have any 3G operations and is the smallest mobile operator by subscribers.
Mobilink is meanwhile Pakistan's mobile market leader but does not have an LTE presence of its own.
According to the report, Warid will remain a separate entity to Mobilink post-consolidation. Abu Dhabi plans to retain a 20-30% ownership in the company.
The sources said that Ericsson's current managed services contract with Warid is at risk if the merger goes through, due to a reportedly strained relationship between VimpelCom and Ericsson.
This could put the jobs of thousands of Ericsson employees in Pakistan managing Warid's technical affairs at risk.
On the other hand, Mobilink would need to pay compensation to get out of its existing contract with Ericsson, which is valid until April 2016.