Mobile phone operators Robi and Airtel yesterday signed a merger deal that would make the combined entity the second largest operator in Bangladesh.
The merger is now awaiting the approval from the telecom regulator.
The agreement was signed in the Malaysian capital of Kuala Lumpur. The merged company will operate under the brand name of Robi.
“The highly competitive and crowded telecom sector of Bangladesh solicits consolidation and we believe this merger will form greater economies of scale for both the groups,” said Supun Weerasinghe, chief executive officer of Robi.
The move will ensure enhanced value for consumers and benefit the entire industry, he added.
In the merged entity, Axiata, the parent company of Robi, will hold 68.7 percent controlling stake, Bharti Airtel 25 percent and NTT DOCOMO of Japan 6.3 percent.
Currently, Malaysia-based Axiata has 91.59 percent stakes in Robi and Japan's DOCOMO 8.41 percent, meaning both their shares in the Bangladeshi operation will be diluted after the merger.
Going forward, the combined capabilities of Robi and Airtel will be directed towards providing customers an unparalleled portfolio of innovative mobile and broadband offerings at affordable rates, Weerasinghe said.
“We believe this to be a powerful differentiating factor and a very compelling value proposition for our customers.”
As of December 2015, Robi has 2.83 crore active subscribers and Airtel 1.07 crore, making them the third and fourth largest operators in the country respectively in terms of subscriptions.
Market leader Grameenphone has 5.67 crore active users and Banglalink, which holds the No. 2 spot, has 3.29 crore subscribers.
Robi and Airtel opened talks on a possible merger at the end of August last year and formally applied to the Bangladesh Telecommunication Regulatory Commission a fortnight later.
The regulator gave preliminary approval to the merger on September 29 last year with some conditions. But it dithered in giving the final decision.
Due to the dragging of the matter, the two operators went to court, and on January 25 the court gave eight weeks to the government and the telecom regulator to come to a final decision about the proposed merger. “According to court order we will get a result before March 24. We are expecting a positive result on that,” said a Robi official. In the meantime, the BTRC drafted in two professors to conduct a market study and gauge the socio-economic implications of the merger.
Robi yesterday said in a statement that after the merger the operator can reward its subscribers through lower within-network (on-net) call rates as it will then be part of a 3.9 crore-strong customer base.
There will be improved mobile data and broadband services too, which will have a multiplier effect on productivity in the economy.
Senior officials of Robi said current subscribers of the two operators will not see any change in their numbers in the next three years. “We do not even plan to change Airtel's access code of 016,” an official said.