Airtel is in exclusive talks to merge its Bangladesh operations with Robi Axiata

Bharti Airtel, the world's third largest telecom operator by subscribers, is in talks with Axiata-owned Robi to merge with its Bangladesh operations. Even After acquiring Warid's Bangladesh unit, Bharti Airtel hasn't seen much growth, even after renaming the unit and launching various customer-centric products as well as high-speed 3G network. It is still lagging behind other three operators; market leader Telenor Group-owned Grameenphone, Orascom-controlled Banglalink, and Malaysian Operator Axiata's local unit Robi Axiata.

Latest subscriber figure from Bangladesh telecom regulatory, BTRC, states that Airtel has 9.08 million users with a market share of just 7.05 percent. If the merger talks with Robi turns out to be successful, the joint entity can have a market share of 27.95 percent, overtaking Banglalink, which has 32.4 million subscribers. However, the combined entity would still trail market leader Grameen Phone.

Airtel and Robi Axiata haven’t shared much information, but indicated that primary talks are going on regard this. "There is no certainty that this discussion will lead into the execution of binding definitive agreements between the parties," the companies said in a joint statement on Wednesday. Earlier, Airtel tried to sell its towers in Bangladesh. However, Airtel claimed that it was doing so to cut costs, but they are committed to operate in Bangladesh. This is why Bharti Airtel hasn't seen success in Bangladesh;

• Bharti entered the Bangladesh market after all the operators.
• Bharti Airtel purchased Warid Mobile, which has bad network, and was facing issues due to low subscriber base.
• Grameen Phone & Banglalink were present in the market since the country's first GSM launch.
• Grameen Phone and Banglalink has a very robust 2G network.
• Airtel-focussed on improving the customer experience through new products, but other operators were still providing services at cheaper rates.
• Bangladesh market is quite different than India as lower pricing is the key for success there, and Airtel missed the point.
• MNP facility isn't available in Bangladesh, so people aren't ready to lose their numbers.
• Grameen Phone deployed 3G with 10 MHz spectrum, while Airtel purchased only 5 MHz 3G spectrum.
• Airtel network is quite good in the cities but not in villages.
• A lot of consumers in Bangladesh use more than one SIM to get offers from different operators.
• Low-cost offerings and F&F services from Grameen Phone and Banglalink are quite popular with consumers so most of them don't go to other operators.
• Postpaid-like packages are available for prepaid connections in Bangladesh, but Airtel tried to implement India-like model which didn't work well.

We at TelecomTalk predict that if the merger happens, both the operators will be benefitted as Robi Axiata has access to more towers, and it wants to buy towers. On the spectrum front, the joint entity's combined spectrum can help them in reaching out in more villages. Airtel's customer-centric offering can bring a new touch to Robi's vast network. The entity's 3G spectrum pool will be 10 MHz, similar to what market leader's Grameen Phone. As private operators have BWA 4G spectrum there, having a high-speed 3G network will help the entity to compete them. They can also launch 4G LTE in the future using FDD standard through excess 1800 MHz band.

Though Airtel confirmed that "Axiata Group Berhad ("Axiata") and Bharti Airtel Limited (“Bharti”) (collectively “Parties”) wish to announce that they have entered into an exclusive discussion to explore the possibility of combining the business operations of their telecommunication subsidiaries in Bangladesh; namely, Robi Axiata Limited and Airtel Bangladesh Limited. There is no certainty that this discussion will lead into the execution of binding definitive agreements between the Parties. This announcement is to facilitate the on-going discussions and exchanges of information between the Parties, including but not limited to discussions with the relevant regulatory authorities. Axiata and Bharti will issue further announcement in the event there is any material development on this matter.

If you can remember, Bharti focussed on other nations when it was facing stiff competition in home market, they spread the network in other nations. But now, its home market became profitable as data market is surging, and people are spending much more for data than they used to spend for voice. So, we can say that Airtel trying to focus again on its home market, while reducing debts by selling unproductive assets, and merging them with the biggies.