Bharti may be seeking more in Bangladesh

Bharti Airtel’s ambition to become an international group in the telecom sector has fueled an industry buzz that the group may be looking at another acquisition in Bangladesh.

Last month, Bharti announced a deal to acquire 70% in Warid Telecom.

A very senior industry representative participating in the Mobile World Telecom Congress in Barcelona told DNA Money: “Bharti could acquire a big player in Bangladesh.” He did not divulge more.

He, however, cautioned that operators must not rush to just grab market share while ignoring financials.

At present, Bangladesh has six mobile phone operators — Grameenphone, Banglalink, Aktel, Warid, CityCell and Teletalk.
Grameenphone is the market leader with a SIM share of 44%, followed by Banglalink at 24%, Aktel at 21%, Warid Telecom at 5%, Citycell at 4% and Teletalk at 2%, according to data available with the telecom regulator in that country.

Earlier this week, Bharti group confirmed that it had entered exclusive talks with Kuwait’s telco, Zain, for its South African assets. The two groups would be in dialogue till March 26 to decide future course of action.

Bharti intends to acquire a controlling stake in Zain for around $10 billion, if the deal gets regulatory approvals.

The Bharti stock had crashed after the proposed deal with Zain was announced recently. But Bharti group chairman Sunil Mittal has criticised analysts and brokerage houses, saying that they have been unable to understand the proposed deal.

Meanwhile, Bharti chief executive Manoj Kohli, who is set to take over as the international operation head of the group from April 1, gave his keynote address a miss at the Barcelona telecom meet, perhaps to work on the Zain transaction.

Kohli was among the few Indians scheduled to speak at the Barcelona summit. But, Kohli told this newspaper that he was not attending the Barcelona meet this time and that he was in Delhi.
Sunil Mittal, who addressed a session on policy and regulation, indicated that Kohli would make an announcement on the financing of the Zain deal in a few days. Sanjay Kapoor, who has now been designated the chief executive of Bharti Airtel, was also at the Barcelona meet along with Mittal.

In a related development, Orascom Telecom CEO Naguib Sawiris, while talking of consolidation, said that his company could not afford to buy the African assets of Zain at this point.

Also, he indicated that managing African assets is a very challenging job, due to corruption, bureaucracy, and crime. As for Bharti’s plans of striking a deal with Zain’s African operations, he added, that for Mittal it may be a good step as he wants to turn Bharti into a global company.

Orascom unit, Banglalink, is one of the operators in Bangladesh, and earlier there were talks of Banglalink and Aktel merging. Citycell of Bangladesh is a Singtel group company, and Singtel is the single largest shareholder in Bharti at around 32%.

The telecom tariff is believed to be the lowest in Bangladesh, even less than the Indian market, with the average revenue per user (ARPU) per subscriber per month in the range of 180 taka (Bangladesh currency) to 250 taka. And, the minutes of usage (MOU) is said to be linked to the tariffs being offered.

For the recently concluded Warid deal, Bharti would make a fresh investment of $300 million for the venture.