Dialog-Airtel deal prompted by high tariffs, economic crisis
Sri Lanka’s telco sector will be further consolidated with the recent share swap between major telco operators, Dialog Axiata Plc, Axiata Group Berhad, and Bharti Airtel Ltd which entered into a binding term sheet to combine operations of both companies.
Telco industry analysts said that Airtel was trying to exit Sri Lanka for a long time as it has not been profitable, and the situation was exacerbated by high tariffs and the economic crisis in the country. The opportunity for the deal had come up during the past year.
Analysts said that Dialog opted for a share swap for the deal as it did not want to erode its debt ceiling further. Discussions of the proposed transaction are ongoing between the parties and with the relevant regulatory authorities as per applicable laws and regulations, according to a corporate disclosure filed with the Colombo Stock Exchange.
Airtel will be a minority shareholder and its name will not be reflected in the Dialog company. The country will have three major operators, Dialog, Hutch, and Mobitel.
This deal will impact some of the spectrum wars the telco sector in the country has witnessed.
Telco officials said that Dialog will not get 100 per cent of Airtel Spectrum.
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