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India's Bharti to acquire Bangladesh telecom operator

John Ribeiro | Jan. 12, 2010
The company is expanding outside India to counter a saturated local market

BANGALORE, 12 JANUARY 2010 - Bharti Airtel, India's largest mobile services provider, said Tuesday that it will acquire a 70 percent stake in Warid Telecom International, a mobile services operator in Bangladesh.

Bharti Airtel will pay US$300 million [m] for the stake in Warid, a company spokesman said, without giving a date for when the transaction will close.

The deal will give Bharti Airtel control of the management and the board of Warid.

The acquisition is in line with Bharti Airtel's strategy to expand in markets outside India. Its attempts last year to arrive at an alliance with the MTN Group did not meet with the approval of the South African government which wanted to maintain MTN's separate identity.

Last year, Bharti Airtel also launched operations in Sri Lanka where it claims over 1 million customers.

Warid is a wholly owned subsidiary of the Dhabi Group which will continue to hold 30 percent share in the operator after the transaction is complete. Dhabi will continue as a strategic investor and will have its nominees on Warid's board, Bharti Airtel said in a statement to the Bombay Stock Exchange.

With a population of over 160 million, and with only 32 out of 100 people having telephones, Bangladesh is a promising market, Bharti Airtel said.

Warid had 2.9 million subscribers at the end of November, and ranked fourth in the market after Grameenphone, Axiata Bangladesh, and Orascom Telecom Bangladesh, according to the Bangladesh Telecommunication Regulatory Commission.

The Indian mobile services market is meanwhile also growing. India added 17.65 million new mobile subscribers in November, taking the total to 506 million, according to Telecom Regulatory Authority of India.

Bharti Airtel had about 116 million subscribers at the end of November.

But competition from new entrants has pushed tariffs to below 0.01 Indian rupees (US$0.0002) per second for voice calls. Earlier voice calls were typically charged by the minute. Expansion into rural markets has also lowered average revenue per user.

 

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