Indian’s biggest mobile operator, Bharti Airtel, has sought regulatory approval to buy 70% of Bangladeshi company Warid, The Daily Star newspaper reported.
While officials at Bharti declined to confirm the report Wednesday, the company is keen to expand outside its home market, where cutthroat price competition from new entrants is shrinking profitability.
The value of the deal could be $900 million (€617m) , The Daily Star said on its web site, quoting officials from Warid, Bangladesh’s fourth largest mobile operator. Warid’s controlling stakeholder, the Abu Dhabi Group, has told the Bangladesh Telecommunications Regulatory Commission (BTRC) saying it wants to sell its 70% stake in the company, BTRC chairman Zia Ahmed said.
Bharti’s shares rose 2.7% to close at 325.50 rupees on the Bombay Stock Exchange.
“We are always looking for opportunities” in Bangladesh and other south Asian markets, Akhil Gupta, deputy chief executive of the parent company Bharti Enterprises, told reporters at a conference in New Delhi Wednesday. But he declined to comment directly on the potential Warid buy.
It is Bharti’s first offshore bid since the collapse of its efforts to merge with South African-based MTN. The deal, which would have created an Indian-African giant with 200 million customers, failed because of political opposition in South Africa.
Warid had 2.79 million subscribers in October compared to Bharti’s 115 million customers.
For October, Bharti’s mobile subscriber additions (2.7 million) lagged behind those of Tata Teleservices (3.9 million), which launched a price war in the Indian market by introducing pay-per second billing.
The aggressive price-cutting and the prospect of even more entrants into the market when 3G licenses are issued next year are pushing Bharti to seek growth outside its home market.