Sources told StarBiz that Pakistan Mobile Communications Ltd, better known as Mobilink, has submitted a proposal to sell and lease back its signal towers to edotco Group Sdn Bhd, Axiata’s tower services arm.

An announcement on the deal that potentially could involve up to 9,000 towers is expected to be made later next month.

edotco operates 12,000 km of fibre optic network in Pakistan and analysts consider the company as one of two to be in the running for a signal-tower deal, the other being Towershare, a Dubai-based tower operator. According to reports, Mo billionink, which recently merged with Warid Telecom (Pte) Ltd, has a customer base of 45 millionlion.

The latest tower deal involved Warid, which sold 4,500 towers to Towershare last April. Analysts see more telecommunication infrastructure deals following the rollout of 3G and 4G broadband services in Pakistan from April 2014. According to reports, Pakistan has an estimated 28,000 signal towers.

Axiata, through edotco, would be looking to not only buy over Mo billionink’s signal towers but also build more than 1,000 towers in the northern and southern regions of Pakistan over the next three years with an investment of more than RM400 million.

A source said negotiations were ongoing, with edotco likely to invest an initial RM20 million in the venture. The company was awarded a tower licence last year.

The source said the plan would be to buy Mobilink’s signal towers and then have the company lease these towers from edotco for a period of 10 to 15 years. The source said edotco would benefit from this deal, with the return on investments to be within a six-year period.

When contacted, Axiata said the company has had operations in Pakistan since 2005, managing the fibre-optic network. The company said edotco “is in the process of establishing a subsidiary in Pakistan”.

“All relevant announcements on this matter are publicly available,” it said and that no further announcements would be made with regard to the matter.

RHB Research Institute analyst Jeffrey Tan views the potential deal positively as there would be stable income from the leaseback. “Having already invested in Pakistan, edotco would be more tolerable to local dynamics in terms of regulatory settings,” he said, adding that in the past, edotco had faced challenges in Bangladesh and Sri Lanka.

“The company would be more fa millioniar with the region now,” Tan pointed out.

Another analyst said the company’s familiarity with Pakistan and its regulations would ensure that its interests would be protected, in a region that has known political insta billionity in recent years.

Malaysian High Commissioner to Pakistan Datuk Dr Hasrul Sani Mujatabar said in an interview that the potential deal reflected renewed confidence of Malaysian investors in the country, which had been racked by a series of terrorist attacks in the past.

“Things have changed for the better today and Malaysian companies should seize every opportunity to invest here again,” he said.

Axiata bought a 75 per cent stake in Digicel Myanmar Tower Co Ltd for US$221 million last October from Digicel Group Ltd as part of the strategy to become a major telecommunications infrastructure operator in South and South-East Asia. The company also recently drew down from its US$1.5 billion multicurrency sukuk, intending to use the proceeds for merger and acquisition activities and general corporate purposes.

Besides Axiata, other notable Malaysian companies that have invested in Pakistan include Tenaga Nasional Bhd for power plants and Bandar Raya Developments Bhd in property development.

In February, Axiata, which posted its highest ever revenue of nearly RM20 billion in the financial year ended Dec 31, 2015 secured its shareholders’ approval to acquire an 80 per cent stake in Nepal’s number one mo billione operator, Ncell Pte Ltd, for US$1.365 billion (RM5.67 billion).