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Report claims proposed deal will have structure similar to recently-agreed Bangladesh tie-up.
Fresh from agreeing to merge their operations in Bangladesh, Bharti Airtel and Axiata are holding talks regarding a similar deal in Sri Lanka.
Sources cited by India’s Economic Times on Thursday said the two telcos are discussing a share swap that would see Malaysia-based Axiata be the dominant shareholder and India’s Airtel a strategic minority holder in the combined entity.
Axiata’s Dialog unit leads Sri Lanka’s mobile market, boasting 10.3 million subscribers at the end of December 2015. According to the ET, Airtel sits in fourth place with just over 2 million.
Since 2010, Sri Lanka’s government has enforced minimum fees for mobile services and interconnection, after Airtel’s launch in the country in 2009 sparked a fierce price war. Dialog matches these floor prices, making it impossible for rivals to compete on price.
Rumours that Bharti Airtel planned to sell its operations in Sri Lanka and Bangladesh emerged in September 2015.
In late January, Bharti agreed to merge Airtel Bangladesh with Axiata’s Bangladeshi arm Robi Axiata. The deal will see Axiata take a 68.3% stake in the combined entity, while Bharti Airtel will hold 25%. The outstanding 6.7% will be held by Japan’s NTT DoCoMo, which currently owns an 8.41% stake in Robi Axiata.
