Mergers sweeping South Asia

Posted on November 27, 2015  /  1 Comments

First it was Bangladesh: Robi and Airtel. Then it was India: Reliance and Sistema plus maybe Aircel. Sri Lanka: SLT/Mobitel and Hutch. Now Pakistan: Mobilink and Warid.

VimpelCom is looking to combine Pakistani unit Mobilink with local rival Warid Telecom, claiming the first merger in the country’s telecoms sector. The new entity will serve 45 million customers.

The move will allow Mobilink and Warid to “accelerate the availability of high-speed mobile telecommunications”. The partners also claim the new entity will provide consumers with better prices and improved access to facilities such as mobile financial services, VimpelCom said in a statement.

Under the terms of the deal, Mobilink will first acquire 100 per cent of Warid’s shares in exchange for the latter’s owners, the Dhabi Group, taking a 15 per cent stake in Mobilink. The transaction is expected to close within six months, subject to approvals.

For long, we have been arguing for countries to have unambiguous exit policies. Absent this, mergers simply become another opportunity for rent seeking, sadly.

1 Comment

  1. Bangladesh telecom regulator has planned to conduct a study on the socio-economic implications of the proposed merger of Robi and Airtel. It has engaged two university teachers for conducting the study. It’s a perfect example of rent seeking.