Bangladesh’s prime minister’s office approved the planned merger of Robi Axiata and Airtel, which was first announced in January.
“The proposal has been cleared by the PMO,” an official told the Dhaka Tribune, noting that the government will go ahead with a plan to charge Robi BDT5.07 billion ($63.5 million) to use Airtel’s 1.8GHz spectrum, as well as a BDT1 billion merger fee.
The spectrum fee (BDT338 million per megahertz) is aimed at making up the difference between the price Robi paid for spectrum in 2011 and the lower price Airtel paid in 2005.
According to a Bangladesh Telecommunication Regulatory Commission representative, the deal still awaits court approval, which is expected this week, the Tribune reported.
Malaysia’s Axiata Group and India’s Bharti Airtel had been in talks since last September. The merger will create Bangladesh’s second largest player, behind market leader Grameenphone. The combined entity will have a customer base of 37.3 million and a 28.5 per cent market share, pushing it past current number two Banglalink with its 24 per cent share.
Airtel has less than a 7 per cent market share in Bangladesh and is the fourth largest among eight operators – the four smallest have a combined share of less than 5 per cent. Number one operator Grameenphone has a 43 per cent share, according to GSMA Intelligence.
After the deal is finalised, Robi’s parent company, Axiata, will hold a 68.3 per cent share in the new entity, while Bharti Airtel will have a 25 per cent interest.