Malaysia’s Axiata Group and India’s Bharti Airtel yesterday (28 January 2016) signed a definitive agreement to merge their respective mobile network operating subsidiaries in Bangladesh, Robi Axiata and Airtel Bangladesh. Post-merger, the combined entity operating under the Robi brand will serve roughly 40 million Bangladeshi customers, overtaking Banglalink as the country’s second largest operator behind GrameenPhone. Under the agreement of undisclosed value, Axiata will take a 68.3% controlling stake in the combined entity, while Bharti will hold 25%, and the remaining 6.7% will be held by Robi’s existing minority shareholder NTT DOCOMO of Japan. The proposed transaction is subject to approvals from the relevant authorities and is expected to complete in the first half of 2016, reducing Bangladesh’s number of cellular competitors to five.
A press release claims that the combined Robi and Airtel will ‘deliver the widest mobile network coverage across Bangladesh,’ whilst the merger will also result in a stronger position in the mobile internet segment, as well as creating a wider sales and distribution reach – supported by ‘the largest network of customer service centres across the country’. Supun Weerasinghe, CEO of Robi Axiata, 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 … to optimise strategies and deliver enhanced value to consumers, benefitting the industry at large.’ One benefit flagged up by the merging parties is an increase in the number of Robi/Airtel customers who will take advantage of lower-rate on-net phone calls.
At end-December 2015 third-ranked Robi Axiata had 28.317 million active 2G/3G mobile customers, compared to fourth-placed player Airtel Bangladesh’s 10.710 million total, giving a combined user base of 39.027 million, which would put the merged cellco a significant margin ahead of VimpelCom-backed Banglalink with 32.865 million subscribers at the same date, although remaining a long way behind Telenor Group subsidiary GrameenPhone with 56.679 million active SIMs at the end of the year. The signing of the Robi-Airtel merger agreement follows the September 2015 announcement that the pair had entered into exclusive discussions on combining their businesses in Bangladesh.