BongoNews:

Robi and Airtel have formally applied for permission to merge their operations from the telecom regulator, a move that will turn the combined entity into the second largest mobile operator after Grameenphone in Bangladesh.

“We received a joint application. The approval process will start in a short while,” said Md Sarwar Alam, spokesman for Bangladesh Telecommunication Regulatory Commission.

The merger will also require the government approval, on top of the regulator’s recommendation, to go through, he added.

Both the operators plan to start the integration process next week, with the view to completing the merger by January next year, according to senior executives of Robi and Airtel.

Robi will have a 75 percent stake in the merged entity and Airtel 25 percent, according to the joint application signed by Supun Weerasinghe, chief executive officer of Robi, and PD Sarma, managing director of Airtel Bangladesh, to the telecom regulator.

Of Robi’s 75 percent stake, 70 percent will be owned by Axiata Group, Robi’s Malaysia-based parent company, and 5 percent by Japan’s NTT DOCOMO.

At present, Axiata Group’s share in Robi is 91.59 percent and NTT DOCOMO’s 8.41 percent.

The merged entity will be registered as Robi Axiata Ltd and it will operate under the brand name of Robi, according to BTRC officials.

As per the joint application, Robi and Airtel’s spectrum will be allocated to the merged entity.

The necessary changes and arrangements in numbers will be attained without imposing any costs to customers, according to the letter.

The existing Airtel subscribers will continue to use the 016 code, with the issuance of new connections from the 016 numbering plan to be discontinued after three years from the date of amalgamation of the two entities.

Meanwhile, officials of Airtel, of various rankings, said they are feeling insecure about their jobs as Robi is unlikely to retain all the Airtel employees after the merger.

At present, there are about 800 officials in Airtel, of which 470 are permanent.

“This is a frustrating deal for us as we were doing very well in recent times,” said an Airtel employee.

As of July, Robi’s customer base stood at 2.79 crore and Airtel’s approximately 91 lakh, according to BTRC statistic.

The combined entity will have the second largest subscriber base in Bangladesh. Grameenphone, the largest operator, has 5.3 crore subscribers.

After the merger, Banglalink, the second largest operator with 3.2 crore subscribers, will come under tremendous pressure from competitors.

In fiscal 2013-14, Robi’s gross revenue was Tk 4,672 crore and Airtel’s Tk 1,713 crore, according to the telecom regulator’s annual report.

Robi has been logging in profits for three consecutive years now.

Earlier in August, Robi and Airtel signed a non-binding agreement to merge their Bangladesh operations.

Airtel entered Bangladesh in 2010 by acquiring a 70 percent stake in Warid Telecom. Later in 2013, it picked up the remaining 30 percent. Its licence expires in 2018.

Robi started operations in 1997 under the brand name of AKTEL. The operator renewed its licence in 2011 after completing its first 15-year tenure.

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