PACRA Assigns Preliminary Rating to Pakistan Mobile Communications Limited | Sukuk PKR 5bn | TBI

Pakistan Mobile Communications Ltd (‘PMCL’ or 'the Company’) ranks as Pakistan’s top telecom operator with ~37% market share and ~73mln subscribers as of March 2025. PMCL stands at the forefront of 3G and 4G service provision, driving innovation and shaping the telecommunications industry. Through its strategic expansion into Digital Financial Services—via Jazz Cash and Mobilink Microfinance Bank—it plays a key role in advancing financial inclusion across the region. In addition, the Company is steadily broadening its presence in high-growth domains such as data analytics, cloud computing, fintech, and mobile entertainment. As per, Pakistan Telecommunication Authority, the telecom industry recorded ~17% revenue growth, reaching PKR ~955.2bln in CY24. This growth was primarily driven by the expansion of 3G and 4G services. Out of the total, the cellular mobile operators (CMO) contributed ~PKR 629.2bln. In CY24, PMCL saw a ~14% increase in revenue, with net margins improving from ~1.9% in CY23 to ~15.3% in review period. This strong performance was fueled by increased 4G penetration and accelerated adoption of digital services. The Parent Company, VEON, continues to invest in Pakistan’s digital ecosystem through OTT platforms and cloud solutions. The Company has recently concluded the sale of its tower infrastructure to Engro Connect, following the receipt of all necessary regulatory approvals. With this transaction, PMCL becomes the first telecom operator in Pakistan to divest its tower assets. The Company's financial risk profile remains adequate, with comfortable coverages, cashflows, and working capital cycle. Capital structure is leveraged, and borrowings are mainly comprised of long-term borrowings. In CY24, the leveraging increased to ~69% (CY23: 53%) primarily due to license fee payments and capital expenditure requirements and inclusion of short-term debts towards the end of year at sub KIBOR rate.
The ratings are dependent upon the sustenance of a leading market position, robust revenue growth and profitability, and a sound financial matrix. As capital structure becomes leveraged, maintenance of sound financial discipline is imperative to hold.

About the Entity
Pakistan Mobile Communications Limited – brand name ‘Jazz’ commenced its operations in August 1994. The Company is a subsidiary of International Wireless Communications Pakistan Limited, which holds ~85% of the issued share capital in the Company. VEON Pakistan Holdings B.V holds ~15% of the issued share capital in the Company. The ultimate parent Company is VEON Ltd. VEON provides essential communications and digital services to ~160mln customers in Six of the world’s most dynamic countries. The Company's Board of Directors (BoD) is mainly composed of representatives from VEON. Mr. Aamir Ibrahim, the CEO, has over two decades of experience in the local and international markets.

About the Instrument
PMCL is set to issue the Rated, Secured, Medium Term and Main Board Listed Sukuk. The issue amount for Sukuk, is up to PKR 5,000mln (Exclusive of PKR 3,000mln). The funds will be utilized for meeting the working capital requirement. The tenor shall be of ~5 years from the issue date, with a grace period of ~1 year. Principal is to be redeemed on semi-annually basis. Profit payment would be made on semi-annual basis, though, profit rate is yet to be decided.