Robi-Airtel merger crosses PMO hurdle

Prime Minister Sheikh Hasina, also the minister in charge of the Posts and Telecommunications Division, has approved the merger of the country’s third- and fourth-ranked mobile phone operators (by market share), Robi and Airtel, to create the second largest operator after Grameenphone.

“The Prime Minister approved the merger of Robi and Airtel on Sunday. The Ministry (Posts and Telecommunications Division) will officially inform us of the decision of the prime minister today (Monday) or tomorrow (Tuesday) by sending us a letter,” Bangladesh Telecommunication Regulatory Commission (BTRC) Chairman Dr Shahjahan Mahmood said.

The BTRC chairman said there are still some more procedures to be completed for the merger between the local operations of multinationals Axiata Berhad (Robi) and Bharti Airtel (Airtel) to be completed. Next the merger proposal will be sent to the Law Ministry for vetting and subsequently to the Registrar of Joint Stock Companies and Firms, he said.

Shahjahan Mahmood however could not disclose how much time it would take still for the merger to be completed. “It is a lengthy process. It will depend on the completion of the remaining procedures,” he said.  

On January 28 last, Robi and Airtel signed a merger deal in Malaysia. The merged company will operate under the brand name of Robi. Axiata would take management control of the combined entity, holding a majority interest while Airtel would take a minority stake.

Bharti was previously considering divesting its operations in Bangladesh after its South Asia revenues dropped by 11% in the second quarter of the last fiscal. Robi meanwhile saw its revenue grow 17% in the first half. BTRC, the regulator, approved the merger last October, not long after it was first made public that talks were being held.

On March 16, 2016, the BTRC gave its green signal to the Robi-Airtel merger. Later the merger proposal also received the approval of the Finance Ministry, and was finally sent to the Prime Minister’s Office for approval of the Prime Minister. Once completed, it would be the first such merger in the country’s telecommunications industry.

According to the BTRC statistics, Robi Axiata Limited (Robi) has 27.442 million mobile phone subscribers, while Airtel Bangladesh Limited (Airtel) has 9.892 million subscribers in the country. Second-placed Banglalink Digital Communications Limited has 31.941 million subscribers, that is expected to be eclipsed by the new merged entity.

Grameenphone Ltd. (GP), the market leader, alone has 56.909 million mobile phone subscribers out of the country’s total 131.376 million subscribers.

However, the new merged entity will trump GP in terms of spectrum. GP currently has 32GB of spectrum, but the new Robi, once the merger is complete, will have 39 GB.