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| Edited By: Nivedita Mookerji |Source: DNA |Updated: Mar 17, 2018, 02:26 AM IST
Bangladesh authorities, including the country’s telecom regulator, are moving swiftly to enable a deal between India’s largest telecom company by subscriber numbers, Bharti Airtel, and Dhaka-based Warid Telecom International.
India’s official response to the proposed transaction is not known yet, though sources say Warid’s operations in Pakistan could be a possible regulatory hurdle.
Bharti’s earlier attempt to forge a deal, with South Africa’s MTN, is said to have failed over regulatory issues.
News reports originating in Dhaka on Tuesday quoted the chairman of the Bangladesh Telecommunication Regulatory Commission, Zia Ahmed, as saying approval had been granted to Bharti for investing in Warid’s assets.
The regulator has permitted Bharti to initially invest $300 million in Warid, which is controlled by UAE-based Abu Dhabi Group.
It is believed that Bharti wants to buy around 70% in Warid, which could require an investment of between $900 million and $1 billion.
Sources close to Warid had recently said the deal with Bharti could be closed as early as mid-January.
Going by reports, Bharti Airtel has been given 30 days to submit a detailed investment plan to the Bangladesh telecom regulator for the proposed deal.
However, Bharti refused to comment.
Officials at Warid also did not talk on the deal.
Only last month, Bharti Enterprises group deputy CEO Akhil Gupta had told reporters on the sidelines of an event, “We have been always interested in expanding in the Saarc countries and that includes Bangladesh.”
At that point, to a specific query on Warid, a Bharti spokesperson had said, “We keep evaluating international expansion opportunities from time to time. However, at this point, we do not have anything definite to share.”
On December 19, barely two months after the proposed $24-billion deal between Bharti and MTN had failed, Dhaka’s Daily Star newspaper reported that Abu Dhabi Group had sought approval from the Bangladesh Telecommunications Regulatory Commission for the Indian telco to pick up a stake in Warid.
Warid Telecom is a joint venture between Abu Dhabi Group and SingTel, which is also a foreign partner of Bharti Airtel. Warid is currently operational in Bangladesh and Pakistan, and is set to start operations in Uganda and Congo.
As of end-November, Bharti Airtel had over 116 million subscribers in India.
Warid, on the other hand, had 2.79 million subscribers in Bangladesh as of end-October, and was the fourth-largest operator in that country.
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.
The Indian telecom sector is currently in the midst of a tariff war, with operators offering dirt-cheap calling rates. The Telecom Regulatory Authority of India had recently asked telcos to make presentations on their respective tariffs, to determine the business feasibility of such rates.
This, when phone tariffs in the country are the lowest in the world already, resulting in low average revenue per user for the operators .
India has crossed the 500-million mobile subscriber mark, and teledensity is not even 50% yet.
Bharti has maintained that it wants to take India’s mobile phone model to other parts of the world, mainly Africa and Saarc countries. Also, when its transaction with MTN collapsed, Bharti top officials had indicated that the group would now identify smaller targets. And Warid could fit the bill!
Bangladesh has around 51 million mobile users, and the subscriber base is expected to touch 70 million by the year 2011.
There’s huge room for mobile telephony growth in the Bangladesh market, as teledensity in the country was 29% as of May, which explains why Bharti would want a deal with a telco like Warid.
