In a significant move within the telecommunications sector, Bharti Airtel, one of India’s leading telecom operators, announced a merger of its operations in Sri Lanka with Dialog Axiata, a noted telecom service provider in the island nation. This strategic alliance has come to fruition through an equity swap deal that points towards a new era of telecom collaboration in the South Asian region.
Bharti Airtel’s Sri Lankan subsidiary, known as Airtel Lanka, will now be subsumed under the Dialog Axiata brand following a definitive agreement between the involved corporations—a move that is set to shape the future of telecom services within the country.
In the financial year 2023, Airtel Lanka reported a turnover of Rs 294 crore, accounting for a modest 0.21 per cent of Bharti Airtel’s overall business. However, its integration with Dialog Axiata is anticipated to bring about enhanced value creation and significant market synergy.
The formalized agreement has been sanctioned by the respective corporate boards and also received approval from the Telecommunications Regulatory Commission of Sri Lanka (TRCSL), which oversees the sector’s regulation. The TRCSL’s endorsement of the merger underpins its commitment to fostering the growth and development of the telecommunications services throughout Sri Lanka.
Dialog Axiata has been a dominant player in the Sri Lankan telecom landscape, boasting a subscriber base of over 17 million. The company’s inception dates to August 17, 1993, and since then it has grown to become a key telecommunications provider, listed on the country’s premier trading platform, the Colombo Stock Exchange.
This landmark deal will see Dialog acquiring the entirety of the issued share capital in Airtel Lanka in exchange for 10.355 per cent of Dialog’s total issued shares, allocated to Bharti Airtel through a share swap mechanism. The cumulative customer base of the merged entity, including Airtel Lanka’s over 5 million customers, is set to enhance competitiveness and consumer choice in the Sri Lankan market.
Airtel Lanka has been a part of the Sri Lankan telecom industry since commencing its commercial operations in 2009, developing a substantial client base and contributing to the telecom diversity in the region.
Vivek Sood, the Group CEO and Managing Director of Axiata Group Berhad, expressed optimism regarding the merger, citing alignment with Axiata’s overarching strategy of market consolidation. The union of Dialog and Airtel Lanka is aimed not just at market resilience but at capitalizing on harmonious efficiencies that are projected to be of mutual benefit to the shareholders of both conglomerates.
“We hold Airtel Lanka and its workforce in high regard and are enthusiastic about the integration process. Working together paves the way for a unified approach to serving our subscribers,” commented Sood, reassuring of the positive outcomes anticipated from this strategic alignment.
As preparations for the integration of the two companies get underway, both customer bases are keenly watching how this partnership unfolds. With the promise of greater synergies, improved service offerings, and operational efficiencies, this episode marks a crucial chapter in the telecom narrative of the region.
The merger is poised to reshape the telecommunications domain in Sri Lanka, supporting the broader goal of providing high-quality, innovative telecom solutions to an expansive customer audience. Enhanced network capabilities, broader service portfolios, and potential cost benefits from combined operations are among the many advantages that are likely to arise from this merger.
The industry anticipates that this strategic consolidation will bolster Dialog Axiata’s position in the market while it assimilates Airtel Lanka’s operations and expertise. For Bharti Airtel, this move signifies a strategic repositioning that aligns with its international growth ambitions.
Further details can be found on Dialog Axiata’s official communication channels, including its Twitter feed, where the company has invited interested parties to learn more about this transformative business venture.
