NEW DELHI: Telecom major Bharti Airtel has clinched a deal to buy a controlling stake (70%) in Bangladesh’s fourth-biggest mobile phone operator Warid Telecom. The deal will be announced in New Delhi on Tuesday, people familiar with the development told ET.
It is also learnt that, India’s largest telco has got political clearance from the Bangladesh government, including the country's Prime Minister Sheikh Hasina who is currently on a visit to India.
The deal also makes Bharti the first Indian telco to make in-roads into Bangladesh mobile market, where several foreign players already operate. In 2004, Egypt’s Orascom bought out Bangladesh’s Sheba, a year later, Singapore’s Singtel acquired a 45% stake in Bangladesh Telecom and in 2009, Japan’s NTT DoCoMo paid $350 million to buy a minority stake (30%) in AKTEL, majority owned by Malaysia's Axiata.
Last week, Bangladesh’s telecom regulator had approved Bharti Airtel’s bid to buy a controlling stake in Warid Telecom, and has asked for the details of the Indian telco to pump in $300 million into the country’s fourth-largest operator. The Bangladesh government also wants Bharti’s investments in Warid to be over $1 billion over the next couple of years. In December 2009, Bharti sought Bangladesh telecom regulator’s permission to buy a 70% stake from the Abu Dhabi group, the owner of Warid.
The Sunil Mittal-promoted company, which already has operations in Sri Lanka, is pressing ahead with its international ambitions just two months after it failed in its second attempt to merge with South Africa’s MTN. The deal also signals Bharti’s intention to expand overseas through smaller buys across Asia and Africa.
ET had recently reported that Bharti Airtel would pay only a bargain basement price of just Rs 45 lakh ($100,000) for Warid subject to it investing $300 million in Bangladesh telco to enhance its equity base. Warid has around 2.7 million of the country’s 51 million-plus mobile phone subscribers. The proposed acquisition, clearly a distress sale, is one of its kind in recent times, especially considering that telecom valuations globally continue to remain high. GrameenPhone is the largest mobile phone operator in Bangladesh with over 22 million customers.
Orascom Telecom Bangladesh has around 12 million users, while Malaysia's Axiata Group has 11 million. Last week, Bharti chairman and CEO Sunil Mittal met BTRC chairman Zia Ahmed and Bangladesh telecom minister Rajiuddin Ahmed Raju to garner support for the deal. The Abu Dhabi Group has been divesting its telecom assets over the past couple of months.
The Essar Group announced last month that it is investing in Warid Telecom’s operations in Uganda and the Republic of Congo, valuing them at a total of $318 million.
Analysts said mobile phone density in Bangladesh is only about 33% and the market is primed for rapid growth. The number of mobile phone users is projected to double to 100 million by 2013. The Economic Times
It is also learnt that, India’s largest telco has got political clearance from the Bangladesh government, including the country's Prime Minister Sheikh Hasina who is currently on a visit to India.
The deal also makes Bharti the first Indian telco to make in-roads into Bangladesh mobile market, where several foreign players already operate. In 2004, Egypt’s Orascom bought out Bangladesh’s Sheba, a year later, Singapore’s Singtel acquired a 45% stake in Bangladesh Telecom and in 2009, Japan’s NTT DoCoMo paid $350 million to buy a minority stake (30%) in AKTEL, majority owned by Malaysia's Axiata.
Last week, Bangladesh’s telecom regulator had approved Bharti Airtel’s bid to buy a controlling stake in Warid Telecom, and has asked for the details of the Indian telco to pump in $300 million into the country’s fourth-largest operator. The Bangladesh government also wants Bharti’s investments in Warid to be over $1 billion over the next couple of years. In December 2009, Bharti sought Bangladesh telecom regulator’s permission to buy a 70% stake from the Abu Dhabi group, the owner of Warid.
The Sunil Mittal-promoted company, which already has operations in Sri Lanka, is pressing ahead with its international ambitions just two months after it failed in its second attempt to merge with South Africa’s MTN. The deal also signals Bharti’s intention to expand overseas through smaller buys across Asia and Africa.
ET had recently reported that Bharti Airtel would pay only a bargain basement price of just Rs 45 lakh ($100,000) for Warid subject to it investing $300 million in Bangladesh telco to enhance its equity base. Warid has around 2.7 million of the country’s 51 million-plus mobile phone subscribers. The proposed acquisition, clearly a distress sale, is one of its kind in recent times, especially considering that telecom valuations globally continue to remain high. GrameenPhone is the largest mobile phone operator in Bangladesh with over 22 million customers.
Orascom Telecom Bangladesh has around 12 million users, while Malaysia's Axiata Group has 11 million. Last week, Bharti chairman and CEO Sunil Mittal met BTRC chairman Zia Ahmed and Bangladesh telecom minister Rajiuddin Ahmed Raju to garner support for the deal. The Abu Dhabi Group has been divesting its telecom assets over the past couple of months.
The Essar Group announced last month that it is investing in Warid Telecom’s operations in Uganda and the Republic of Congo, valuing them at a total of $318 million.
Analysts said mobile phone density in Bangladesh is only about 33% and the market is primed for rapid growth. The number of mobile phone users is projected to double to 100 million by 2013. The Economic Times
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