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ShareNew Delhi: Just two months after the collapse of the $24 billion merger talks with South Africa's MTN group, Bharti Airtel is once again on the deal path.
It wants to pick up 70% in Warid Telecom of Bangladesh and the two companies are in discussion for a proposed transaction, it is believed. The news has originated from the Bangladesh Telecom Regulatory Commission, but Bharti has denied comment on it.
However, Bharti Enterprises group deputy CEO Akhil Gupta told reporters on the sidelines of an event on Wednesday, "We have been always interested in expanding in the Saarc countries and that includes Bangladesh." Gupta did not elaborate.
To a specific query on Warid, a Bharti spokesperson said, "We keep evaluating international expansion opportunities from time to time. However, at this point, we do not have anything definite to share."
Bangladesh-based Daily Star newspaper reported that Bharti would pay around $900 million for a 70% stake in Warid Telecom. The paper said that UAE's Dhabi Group, which controls Warid Telecom, had already sought approval from the Bangladesh Telecommunications Regulatory Commission for the transaction. Commission chairman Zia Ahmed has confirmed the development, as per the news report.
Bharti would invest $300 million initially, it is believed.
An industry source observed that national security concerns could have an adverse impact on the negotiation, as Warid has a strong presence in Pakistan as well.
Recently, the ministry of home affairs sought a review of the FIPB (Foreign Investment Promotion Board) clearance granted to US-based Telecordia because Pakistan is among the countries where the company had implemented mobile number portability.
Telecordia was earlier cleared by FIPB for investing in India, to implement and manage mobile number portability here.
Also, some years ago, the Indian authorities had objected to Hutch raising the foreign investment level in Hutch Essar (now Vodafone Essar) as it involved indirect holding by Egypt's Orascom, which in turn operated in Pakistan and Bangladesh.
Warid Telecom is a joint venture between Abu Dhabi Group and SingTel, which is a foreign partner of Bharti Airtel also. Warid Telecom is currently operational in Bangladesh and Pakistan, while it is also setting pace to initiate its operation in Uganda and Congo, according to the company website.
Bharti Airtel has over 110 million subscribers in India. Warid had 2.79 million subscribers in Bangladesh as of end of October.
The other telcos in Bangladesh include Grameenphone (majority owned by Norway's Telenor), Orascom Telecom, Banglalink, Telekom Malaysia and Aktel (TM International). Last year, Japan's NTT DoCoMo picked up a 30% stake in Aktel.
While India's mobile phone market has crossed the 500-million subscriber mark, Bangladesh has a little over 51 million wireless subscribers. There's huge room for mobile telephony growth in the Bangladesh market, as the teledensity in the country was 29% as of May. In India, the teledensity is close to 50% now.
Faced with a tariff war and declining ARPUs (average revenue per user), Bharti has been scouting for opportunities to expand outside India, with a special focus on Africa and Saarc region.
