Banglalink plans merger with AKTEL

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Mushir Ahmed
The country's second largest mobile phone company Banglalink has planned a merger with AKTEL to challenge the domination of Grameenphone in Bangladesh's mobile phone market, its global chief said.
Naguib Sawiris, the chief executive officer of Orascom Telecom that owns the Banglalink, told the World Economic Forum in Jordan on Tuesday that the Egyptian group is looking at the possibility of a merger with the third largest operator in Bangladesh.
Sawiris said there was a need for more consolidation in global markets like Bangladesh, because in the 'long term the smaller companies won't be able to compete,' and announced that Orascom was 'in discussions now with Telekom Malaysia, meaning to combine our operations.'
Seventy per cent of AKTEL is controlled by Axiata, which was spun off from Telekom Malaysia in April 2008. The rest is owned by Japan's NTT DoCoMo, which bought the stake from Bangladesh's AK Khan Group for a whopping US$350 million in June last year.
The company has been the second largest operator in Bangladesh for a long time until early last year when it was dislodged by an aggressive Banglalink.
Local officials of both companies are tightlipped on the latest development, although insiders said a merger between the two companies look increasingly likely, given that none have been making any profits for years."Except Grameenphone, all other operators have been bleeding for long in the Bangladesh market. So it's logical for the companies to merge and the alignment would lead to profit," said Fazlur Rahman, a former director of AKTEL, who just retired from the company.
"In the next three years, I don't think more than three operators will exist in this fiercely competitive market." he said.
The merger of the two companies would create a company almost as big as the Norway's Telenor-owned GP, which has been maintaining its dominance in the Bangladesh market ever since its launch in 1998.
According to the Bangladesh Telecommunications Regulatory Commission (BTRC's) latest statistics, GP has more than 21.02 million susbcribers, or nearly 46 per cent of the market.
Banglalink, which is now named Orascom Telecom Banbgladesh, has 10.90 million subscribers and AKTEL 8.83 millions.
Experts said the merger of the two companies would inject a new momentum in the market, which has been suffering from tardy growth since middle of last year.
The country's six operators including GP have just added only five million subscribers in the year ending in April, compared to 15 million in the corresponding period last year.
The companies have complained that overtaxation has killed the growth, forcing smaller players to bleed profusely and GP to hang on to a diminishing profit.
"The alignment would not only create the largest merger in Bangladesh, but also bring a fresh air in an increasingly sluggish scenario," said a top official of a leading operator.
"The combined company would shed fats, create a giant capable of taking the fight to GP. It would also end the slumber in the telecom market and set off a new price," .
"It will make the telecom market interesting agains after more than a year of inaction," he said.