Robi and Airtel signed a merger agreement yesterday with a view to venturing into a joint business operation in Bangladesh.
The joint venture will be recognised as Robi.
The Malaysia-based Axiata Group Berhad and India-based Bharti Airtel Limited inked the deal at Kuala Lumpur, Malaysia.
After their last September agreed merger talks, the two cellphone companies submitted their joint application to Bangladesh Telecommunication Regulatory Commission that is now carrying out the review of the merger’s impact on the existing telecom market.
Rob and Airtel expect that they would get their required approval within the first half of 2016 to set foot in the market jointly.
Robi Dhaka office confirmed the news to the Dhaka Tribune yesterday.
Supun Weerasinghe, chief executive officer (CEO) of Robi, said: “The highly competitive and crowded Bangladesh telecommunications sector solicits consolidation and we believe this merger will form greater economies of scale for both Groups. Additionally, it will result in shared investment capacity of the leading two industry players to optimise strategies and deliver enhanced value to consumers, benefiting the industry at large.”
Jamaludin Ibrahim, president and Group CEO of Axiata, said: “In line with Axiata’s merger and acquisition strategy, in-country consolidation has been one of the Group’s key focus on solidifying its position, unlocking profitability of the market and ensuring long-term growth. Axiata’s track record of successful strategic mergers and integrations in its other markets such as Indonesia, Sri Lanka and Cambodia further qualifies the Group to lead the market consolidation in Bangladesh.”
Gopal Vittal, managing director and CEO (India and South Asia), Bharti Airtel, said: “There is a compelling rationale for bringing together the strength of both entities. The combined entity will be well-positioned to leverage the operational synergies to serve customers better with world-class services and contribute to the growth of the telecommunications sector in Bangladesh.”
Upon completion, Axiata will hold 68.3% controlling stake in the combined entity while Bharti 25%. The remaining 6.7% will be held by the existing shareholder, NTT DOCOMO of Japan. According to a statement of Robi, the combined entity operating as Robi will serve approximately 40 million customers. The joint strength of Robi and Airtel will deliver the widest mobile network coverage across Bangladesh, strengthening its position in the mobile internet segment as well as consolidating its position as the second largest operator in the country.
The joint venture will facilitate the government vision of Digital Bangladesh and drive Foreign Direct Investments (FDI) into the country, according to the statement issued by Robi Axiata Limited yesterday.
The merger will strengthen long-term sustainability of Bangladesh telecom landscape and market structure, secure faster nationwide roll-out of mobile broadband and contribute significantly to the overall economy and revenue of the country, the statement added.
The telecommunications landscape in Bangladesh has been one of high-growth, but intensively competitive with six players.
Industry insiders said the merger is set to strengthen the industry structure, competitiveness and, more importantly, bring greater benefits to customers in terms of network quality and coverage and an improved offering of data products and services.
Axiata is one of the largest Asian telecommunications companies.
It has controlling interests in mobile operators in Malaysia, Indonesia, Sri Lanka, Bangladesh and Cambodia with significant strategic stakes in India and Singapore.
The Group, including its subsidiaries and associates, has over 260 million mobile subscribers in Asia. The Group revenue for 2014 was RM18.7 billion.
Bharti Airtel Limited is a leading global telecommunications company with operations in 20 countries across Asia and Africa.
The company had over 346 million customers across its operations at the end of November 2015.
