Yesterday, there was a significant announcement in Bangladesh: Robi and Airtel announced they were discussing a merger that could result in the creation of two more or less equal sized competitors to the market leader, Grameenphone. Here is my full response:
This is what I said in response to a question about the number of operators in a market four years back.
The market should determine the number of suppliers in a market, not government officials. This requires two things: (1) an orderly policy on market exit, whereby, for example, suppliers have clear rules on what can be done about the assigned spectrum, existing customers, and so on; and (2) transparent license and renewal procedures that allow for as many licenses to be issued as possible within the constraints of spectrum.
These principles are as valid today as they were then. Most of our countries do not do either of the two things well. Obviously, government must look at increases in market concentration and the effects on consumers. But in intensely competitive telecom markets such as those found in South Asia, the first acquisition or merger should not raise big red flags, since even with the reduction of one player, the concentration levels should still be lower than in most developed-country markets.
In a merger, there is no reason to worry about what happens to the customers. They will be looked after by the merged entity. What requires attention is spectrum, especially in light of the convoluted rules that were applied in giving operators spectrum at various times.
The other thing is that whatever decisions are to be taken and whatever approvals have to be given, they should be done quickly and cleanly. It is not good for the companies and for the industry to have uncertainty.
Obviously, not all of it could be carried. Some elements were included in the Daily Star report.