Engro Holdings strengthens position in telecom infrastructure
Engro Holdings Limited has significantly strengthened its presence in Pakistan’s telecom infrastructure sector after expanding its tower network beyond 15,000 sites. This growth follows the successful completion of the Deodar portfolio acquisition, a move that has reshaped the competitive landscape of the country’s tower industry.
With the addition of thousands of new sites, Engro Holdings tower expansion reflects a strategic push to build scale, improve efficiency, and secure stable long-term revenues from shared telecom infrastructure. The company now operates 15,012 towers nationwide, making it one of the largest independent tower operators in Pakistan.
Deodar acquisition drives rapid growth
The Deodar portfolio acquisition, completed in June 2025, added 10,617 towers to Engro Holdings’ existing footprint. This deal alone more than doubled the company’s tower base and accelerated its growth trajectory at a time when telecom operators are increasingly focused on cost control and network sharing.
The acquisition was financed through a balanced 65:35 debt-to-equity structure. While this raised leverage levels, it also strengthened Engro Holdings’ recurring asset base. These long-term infrastructure assets are considered stable and cash-generating, especially as demand for mobile data and network coverage continues to rise across Pakistan.
Improving tenancy ratios to boost earnings
A key focus of the Engro Holdings tower expansion strategy is improving tenancy ratios. As of December 2025, the tenancy ratio stood at 1.25x for the original portfolio and 1.3x for the Deodar towers. Management believes there is strong room for growth.
The long-term target is a blended tenancy ratio of 1.8x to 1.9x. Achieving this goal would significantly increase revenue per tower and enhance operating margins. Higher tenancy means multiple telecom operators sharing the same tower, lowering costs for operators while increasing returns for the tower owner.
New towers and energy efficiency plans
Looking ahead, Engro Holdings plans to add around 400 to 450 new towers every year, depending on market demand. Each new tower is expected to cost about Rs10 million to construct. However, rising energy costs have made solarization an increasingly important part of the expansion strategy.
Installing solar solutions on towers requires an additional investment of Rs2 to Rs2.5 million per site. Despite the upfront cost, solarization helps reduce long-term energy expenses and improves operational reliability, especially in areas with unstable power supply.
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Taxation and financial outlook
On the taxation side, management has indicated a total super tax exposure of around Rs14 billion. After expected refunds and adjustments, the actual cash impact is likely to fall between Rs8 and Rs9 billion. This easing of pressure supports liquidity and allows continued investment in tower expansion.
Concerns about possible new taxes on certain power-related components were also addressed. Management stated that no negative financial impact is expected, as there are no clear legal grounds for such measures.
Strategic positioning for the future
Beyond telecom towers, Engro Holdings continues to fine-tune its broader investment portfolio. A recent reduction in shareholding in its polymer subsidiary reflects a focus on core infrastructure assets. Meanwhile, upcoming industrial projects are expected to add further income diversity over the medium term.
Overall, Engro Holdings tower expansion places the company in a strong position within Pakistan’s evolving telecom sector. With scale advantages, improving tenancy ratios, and a focus on energy efficiency, the company is well placed to deliver stable cash flows and long-term growth.
