Dialog Axiata approaches Airtel Lanka, sources say

5 Mar 2013

Malaysian group Axiata, parent of Sri Lanka’s largest cellco by users Dialog Axiata, has approached India’s Bharti Airtel with the intention of acquiring its Sri Lankan mobile subsidiary Airtel Lanka, according to people privy to the development cited by The Business Standard. The move, which was not confirmed by either cellco, would not be the first time Axiata had attempted to expand Dialog’s cellular empire. In 2009 the Malaysian firm prepared a bid to acquire Millicom’s Tigo-branded Sri Lankan unit, but withdrew its interest because it considered the asking price too high, allowing Etisalat of the UAE to enter the market instead. Axiata is also thought to have approached Hong Kong’s Hutchison with a view to acquiring its Hutch Lanka operations, but the two companies reportedly failed to reach a consensus on the valuation of the business. Dialog has succeeded in expanding its operations by diversifying into the fixed-wireless and broadband sectors, purchasing wireless in the local loop (WiLL) and WiMAX provider Suntel in March last year for USD34 million, amalgamating the new acquisition with its existing Dialog Broadband Networks (DBN) division, according to TeleGeography’s GlobalComms Database, which adds that DBN went on to launch a 4G TD-LTE wireless broadband network at the end of December 2012.

Selling Airtel Lanka could be beneficial to Bharti to reduce debt, while it might be considered more valuable for the Indian group to focus on investing in its faster growing African subsidiaries rather than pour further investment into the relatively small, crowded Sri Lankan market. Since launching commercial services in Sri Lanka in January 2009, Airtel had invested over USD325 million in the country by the end of 2012, by which date it said it had rolled out a 3G network presence in ‘all regions’, TeleGeography’s CommsUpdate reported previously, while the cellco has also indicated it is preparing to join rivals Mobitel, Dialog and Etisalat Lanka in the 4G LTE segment. Airtel Lanka had 1.7 million subscribers at the end of December 2012, compared to Dialog’s 7.83 million at that date; in addition the latter controlled over 500,000 CDMA fixed-wireless customers via its combined DBN/Suntel operations plus a relatively small WiMAX subscriber base, according to GlobalComms. Another division, Dialog TV, is the island’s largest satellite pay-TV provider.

Sri Lanka, Hutchison Telecommunications Lanka, Dialog Axiata, Bharti Airtel, Bharti Airtel Lanka, Axiata,

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