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Robi-Airtel merger gets prime minister’s approval in Bangladesh

Approval has been granted for the proposed merger of Bangladeshi operators Robi Axiata and Airtel by the country’s prime minister.

An official from the prime minister’s office stated that “the proposal has been cleared by the PMO”, including both the planned BDT1 billion merger fee as well as the BDT5.07 billion ($63.5 million) charge that Robi must pay to use Airtel’s spectrum.

This fee, which amounts to BDT338 million per megahertz, is intended to balance out the difference in spectrum prices paid by the operators, with Robi’s 2011 spectrum acquisition considerably more expensive than Airtel’s 2005 purchase.

Court approval for the deal is expected this week, according to the Bangladesh Telecommunication Regulatory Commission. The merger was originally announced in January following the commencement of talks between Malaysia’s XL Axiata and India’s Bharti Airtel last September. Once the deal closes, Axiata will hold 68.3% of the combined entity, while Bharti’s stake will be 25%.

With a combined customer base of 37.3 million and a market share of 28.5%, the merged entity will become the second largest player in Bangladesh, after Grameenphone. Currently, second place is held by Banglalink which has a market share of 24%.

Currently, Airtel comes fourth out of Bangladesh’s eight operators, with a market share of less than 7%. The four players smaller than Airtel have a combined market share of less than 5%, while Grameenphone leads the market with 43%.

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