Korean SK Telecom wants to buy 49pc stake in TeleTalk

Employees are at work at a showroom of TeleTalk in Dhaka. South Korea's SK Telecom intends to acquire 49 percent stake in the state-run cellphone operator. Photo: Amran Hossain

South Korea's telecom giant SK Telecom intends to acquire 49 percent stake in the poor performing state-run mobile operator TeleTalk.
A team from SK Telecom will visit Bangladesh this month to formally place a proposal in this regard. If accepted, the partnership will infuse dynamism into the beleaguered state-owned enterprise.
However a 3-member delegation of the Korean company headed by its Vice President (India) Myung Keun Lee met the Bangladesh telecom regulator on Tuesday to examine legal aspects and investment atmosphere.
"S K Telecom showed its interest to buy TeleTalk's stake. But the government is yet to decide how its shares would be sold out," said a high official at the Ministry of Telecommunications.
The Korean company initially proposed to buy 100 percent stake of the TeleTalk when it started negotiations in December 2007.
But the government did not agree to the proposal on the plea that any joint venture move would make the state-run company a leading mobile phone operator.
Industry insiders are also hopeful of such joint venture move. They said if it comes into reality, the TeleTalk would flourish.
TeleTalk is the country's smallest operator in terms of subscribers with a 2 percent market share. It went into operation in 2005 with high hopes, but failed to compete with five other multinational operators due to lack of quality services and poor marketing.
Until March 2008, the state-run company had been able to add only 1.01 million customers, whereas its nearest rival Warid Telecom International drew 2.79 million customers, although the latter entered the market in 2007.
Grameenphone has a 17.81 million subscription base, which is followed by Banglalink with 8.31 million subscribers and Aktel with 7.45 million.
The telecom ministry source said within a very short time a 'vendor agreement' will be signed between the TeleTalk and the Bangladesh Telegraph and Telephone Board (BTTB), the parent concern of TeleTalk.
Under the agreement, all TeleTalk's asset, which now BTTB owns, will be handed over to the TeleTalk board.
"The TeleTalk's present paid up capital is very nominal," said a high official of the ministry, adding: "we shall first raise our paid up capital if we sell its stake or list on the capital market."
TeleTalk has taken an initiative to offload up to 30 percent of it shares in the capital market by the end of the year to raise Tk400crore. The company estimated valuation is Tk1300crore.
Its board meets this week to finalise the plans for its initial public offering.
TeleTalk is now expected to follow the footsteps of Grameenphone, the country's largest mobile operator, which has announced plans to list on bourses sometime between July and September. Grameenphone has been valued at around $3.75 billion.
From the rivals' point of view, TeleTalk's joint venture with a foreign giant telecom will definitely bring the company in a position what it should be.
"As a government entity TeleTalk missed its chance to grab the market from the beginning, although it has the highest amount of spectrum of 15.5MHz," said a high official of a mobile phone company.
"If any company with a healthy financial position will forge a partnership with TeleTalk, it would become a strong competitor in the market," he said.

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