Dialog Axiata bulks up with Airtel Lanka acquisition

• Dialog Axiata has agreed to buy Bharti Airtel’s unit in Sri Lanka
• This will further solidify Dialog’s leading position in the market and take its total customer base to more than 20 million
• Upon clearance of the deal, the South Asian market will have three main players

Dialog Axiata has agreed to acquire Bharti Airtel’s operation in Sri Lanka in a step that will solidify its leading position in the South Asian market and reduce the number of mobile operators from four to three. 

In a statement, Bharti Airtel unveiled that Dialog will acquire 100% of the issued shares in the unit, which operates under the Airtel Lanka brand, while the Indian telco giant will be given ordinary voting shares of around 10% of the total issued shares of Dialog.

Financial terms of the deal were not disclosed.

Plans for the merger were first unveiled in a binding term sheet in May 2023, and the proposal has now been given the green light by the Telecommunications Regulatory Commission of Sri Lanka (TRCSL).

The deal still needs to be approved by Dialog’s shareholders and is also pending clearance from the Colombo Stock Exchange (CSE), as well as the completion of other applicable legal, corporate and regulatory compliance procedures.

According to Bharti Airtel, the consolidation “will enable the merged entity to garner economies of scale and reduce duplication of infrastructure, achieve synergies in technology and capital expenditure leading to enhanced high-speed broadband connectivity, voice and value added services, cost savings and operational efficiencies”.

Airtel Lanka’s CEO, Ashish Chandra, explained that the merger is set to “unlock new opportunities for innovation and growth”, which translates to benefits for consumers.

Supun Weerasinghe, director and group CEO of Dialog Axiata, referred to the move as “a significant step forward in our commitment to delivering superior telecommunications services in Sri Lanka”.

Dialog Axiata is the country’s largest operator, with a subscriber base of almost 17 million mobile customers and annual revenues of 187.8bn Sri Lankan rupees (LKR) ($623m) in 2023. Airtel Sri Lanka reported having 3.05 million customers and total revenues of LKR 13bn, equal to around $43m, for the financial year 2022-23 (ending 31 March 2023). Airtel also claims to have established a “state-of-the-art, 5G-ready 4G network across all parts of Sri Lanka”.

The deal will see the Sri Lankan telco market reduced from four to three players: Dialog Axiata will remain the clear market leader, while the second-largest market player is Mobitel with more than 8 million customers, according to data from the GSMA. Hutch Sri Lanka, a subsidiary of CK Hutchison, had 3.5 million customers as of 30 June 2023.

- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV