Axiata takes control of Bangladesh’s Airtel unit in merger deal
17 November 2016 | Alan Burkitt-Gray
Malaysia’s Axiata group has taken control of Bharti Airtel’s Bangladesh mobile business and merged it with its own operation in the country.
The deal, to merge Robi Axiata and Airtel Bangladesh, has gone ahead after approval by the Bangladesh high court, creating a company with 32 million subscribers, second only in the market to Telenor’s Grameenphone.
Axiata will own 68.7% of the merged operation. Indian group Bharti Airtel will have 25% and Japan’s NTT DoCoMo will have 6.3%. No price has ever been given for the deal.
Jamaludin Ibrahim, president and group CEO of Axiata, said: “Axiata’s proven track record of successful strategic mergers and integrations in our other markets such as Indonesia, Sri Lanka and Cambodia has qualified the group to lead the first telecoms merger and initiate market consolidation in Bangladesh.”
Mahtab Uddin Ahmed, CEO of Robi, said: “The merger strengthens the long-term sustainability of the Bangladesh telecoms landscape and business environment, and will secure faster nationwide rollout of mobile broadband as well as contribute significantly to the overall economy of the country.”
Grameenphone, in which Telenor has a 56% stake, has 54 million customers. The other operators in Bangladesh include VimpelCom’s Banglalink, with 29 million, and a state-owned company, Teletalk, with under three million.
Ibrahim said: “In-country consolidation has been one of the group’s key focus in solidifying our position, unlocking profitability and opportunities of the market as well as ensuring better services to customers and the public.”
Airtel entered the Bangladesh market in January 2010, when it bought a 70% stake in what was then Warid Telecom for $300 million. The Indian group bought the other 30% in 2013.
Axiata’s takeover has taken longer than expected. It was announced in January 2016, and then expected to be complete by June. The companies agreed in June to defer completion until September, before finally taking an extra two months.
Ibrahim said: “We are confident this consolidation will secure the country’s further development not only within the telecommunications industry but also act as further impetus to fuel a more mature business and investment environment in Bangladesh.”