Bharti receives green light for 70 per cent of Warid Bangladesh

India’s largest telecom operator, Bharti Airtel has received the approval from Bangladesh’s telecom authority to acquire a 70 per cent stake of Abu Dhabi Group’s Warid Telecom for US$300 million, making it the first Indian operator to enter the Bangladeshi market.

National telecom law states that 5.5 per cent of the sale price, US$16.5 million, must go to the regulator, the Bangladesh Telecommunication Regulatory Commission (BTRC). Warid has 30 days to submit a schedule of Bharti’s initial investment plan to the commission.

The sale by the Abu Dhabi Group’s stake appears to be part of a wider strategy to offload its offshore telecom investments. In November, the UAE-based company announced India’s Essar Group would acquire a 51 per cent stake in certain telecom operations in Africa. Essar Group was reported to be paying around US$150 million for stakes in Warid Telecom Uganda and Warid Telecom Congo. The enterprise valuation of the Uganda and Congo operations collectively was estimated at US$318 million.

Warid owns an additional investment in Pakistan, a joint venture with Singapore’s SingTel, and has not announced any plans to reduce its equity in this market. A statement on Warid Pakistan’s website posted late last year, denies media speculation over a possible merger with an unnamed entity.

Warid is the fourth largest mobile operator in Bangladesh, counting 2.92 million subscribers at the end of November 2009. It launched its operation in the South Asian market as the sixth operator in 2007, and has since invested US$600 million in growing its business. The service provider currently competes with Grameenphone, a Bangladesh-Norway joint venture, Egypt-based Banglalink, Malaysia-Japan joint venture Aktel, Bangladesh-Singapore joint venture Citycell and state-owned Teletalk.

Bharti Airtel provides telecom services within all of India’s 22 licensed circles, as well as in Sri Lanka. As of end-Q309, the operator served more than 113.43 million subscribers.

Low mobile penetration levels, competitive pricing and steady economic growth has enabled Bangladesh to grow from an overall mobile subscriber base of 200,000 in 2001, to 50.5 million as of end-November 2009. However, analysts predict price-warring between operators could fuel the number of customers to top 100 million by 2015.