Sri Lankan operators Dialog Axiata and Bharti Airtel reportedly plan to merge their operations, creating what would be the nation's largest operator.
In a joint statement, Dialog Axiata Plc, Axiata Group Berhad, and Bharti Airtel said they had signed a binding term sheet for the merger of Bharti Airtel’s Sri Lanka operation with Dialog's subsidiary. As part of the agreement, Airtel will receive new Dialog shares representing Airtel Lanka's fair value.
But the deal isn’t done yet. Regulatory and shareholder approvals are required, along with the signing of definitive agreements.
However, this will undoubtedly be an important deal, if it happens, given that Dialog Axiata is already Sri Lanka's largest mobile network operator with 17.4 million subscribers, accounting for 57% of the country's mobile market. SLT Mobitel and Hutch are the other big players in this market.
But Dialog Axiata could be a lot bigger when merged with Airtel Lanka, which has over 5 million customers and is among the fastest-growing service providers in the country.
This deal may not be unexpected. In fact some reports suggest that both Dialog and Airtel have been discussing a merger for a few years. One suggestion is that Dialog will look to capitalize on Airtel’s assets in a bid to build its infrastructure and services for 5G in Sri Lanka.
As Indian publication Mint points out, this announcement came a day after Airtel announced a strategic partnership with Bridgepointe Technologies, a technology advisory firm assisting mid-market and enterprise companies in optimizing technology investments and business results.
This partnership will apparently enable US enterprises seeking to expand into India and Africa to leverage Airtel's digital infrastructure solution.