Banglalink keeps all options open on consolidation: CEO
Friday, 22 May 2009
FE Report
Banglalink has said Thursday it is courting merger with operators other than the AKTEL in its search for profits in Bangladesh's fiercely competitive mobile telecom market.
Ahmed Abou Doma, chief executive officer of the country's second largest mobile company, said the telecom market in Bangladesh is too "crowded with six operators", resulting in financial bleeding for all players except leader, Grameenphone.
"In order to sustain in this fiercely competitive market, and in line with our growth ambitions, we are considering many strategies of which consolidation is an option," he said.
He was commenting on press reports quoting Banglalink's parent group chief Naguib Sawiris as saying that the company has been looking for a merger with third-placed AKTEL, majority controlled by Malaysian mobile phone giant Axiata, in an effort to make profit.
Sawiris said there was a need for more consolidation in 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 (which owns Axiata), meaning to combine our operations."
Abou Doma said AKTEL is not the only company they have been courting for merger, as they are looking for best synergies that would suit the company.
"Our search for consolidation is not restricted to any one operator in particular, and different alternatives are being evaluated. Hence it is too premature to give any indication whatsoever regarding potential consolidation options and timelines at this stage."
The merger of the Banglalink and AKTEL 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) latest statistics, GP has more than 21.02 million subscribers, or nearly 46 per cent of the market.
Banglalink, which is now named Orascom Telecom Bangladesh, 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.
Abou Doma said they would inform the telecom regulator once they finalise their talks.
"Once our negotiations on the different fronts that are being explored reach a more concrete stage, we will obviously share the proposition with BTRC and other concerned government entities."
He, however, ruled out any retrenchment should the company merge with other operator.
"A consolidation that results in the formation of a bigger and stronger entity is in a much better position to retain and utilize its work force, and protect their interests.
"The resulting growth would require a bigger work-force and thus have a positive impact on the overall socio-economic scenario of the country."
"Consolidation is beneficial if it creates better synergies - this usually leads to more efficient sharing of resources in terms of infrastructure, procurement, and marketing."
Banglalink has said Thursday it is courting merger with operators other than the AKTEL in its search for profits in Bangladesh's fiercely competitive mobile telecom market.
Ahmed Abou Doma, chief executive officer of the country's second largest mobile company, said the telecom market in Bangladesh is too "crowded with six operators", resulting in financial bleeding for all players except leader, Grameenphone.
"In order to sustain in this fiercely competitive market, and in line with our growth ambitions, we are considering many strategies of which consolidation is an option," he said.
He was commenting on press reports quoting Banglalink's parent group chief Naguib Sawiris as saying that the company has been looking for a merger with third-placed AKTEL, majority controlled by Malaysian mobile phone giant Axiata, in an effort to make profit.
Sawiris said there was a need for more consolidation in 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 (which owns Axiata), meaning to combine our operations."
Abou Doma said AKTEL is not the only company they have been courting for merger, as they are looking for best synergies that would suit the company.
"Our search for consolidation is not restricted to any one operator in particular, and different alternatives are being evaluated. Hence it is too premature to give any indication whatsoever regarding potential consolidation options and timelines at this stage."
The merger of the Banglalink and AKTEL 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) latest statistics, GP has more than 21.02 million subscribers, or nearly 46 per cent of the market.
Banglalink, which is now named Orascom Telecom Bangladesh, 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.
Abou Doma said they would inform the telecom regulator once they finalise their talks.
"Once our negotiations on the different fronts that are being explored reach a more concrete stage, we will obviously share the proposition with BTRC and other concerned government entities."
He, however, ruled out any retrenchment should the company merge with other operator.
"A consolidation that results in the formation of a bigger and stronger entity is in a much better position to retain and utilize its work force, and protect their interests.
"The resulting growth would require a bigger work-force and thus have a positive impact on the overall socio-economic scenario of the country."
"Consolidation is beneficial if it creates better synergies - this usually leads to more efficient sharing of resources in terms of infrastructure, procurement, and marketing."