Banglalink says consolidation an option to offset losses

Banglalink is reviewing many strategies to sustain and consolidation is one option, the mobile-phone operator’s CEO said in a statement on Thursday amid reports in the international media that it is in merger talks with AKTEL. “It is correct to point out that at this stage all strategic options are being reviewed which are not necessarily restricted to any one operator in particular,” Ahmed Abou Doma, the Banglalink chief executive, said. It was too premature, he added, to give any indication about concrete details about the potential consolidation options and timelines at this stage.

The Banglalink chief dismissed reports of possible job retrenchment.

“On the contrary, a consolidation that results in the formation of a bigger and stronger entity is in a much better position to utilise its work force and protect their interests.

“The resulting growth would require a bigger work-force and thus have a positive impact on the overall socio-economic scenario of the country.

“Once our negotiations on the different fronts that are being explored reach a more concrete stage, we will obviously share the proposition with BTRC and [other government entities concerned],” he said.

“The telecom industry in Bangladesh is already crowded with too many operators. In most developed and developing countries of the world, there are not more than 2-3 operators, whereas in Bangladesh there are six. Except for the market leader, all the others are continually posting losses.”

“In order to sustain in this fiercely competitive market, and in line with our growth ambitions, we are considering many strategies of which consolidation is an option.

“Consolidation is beneficial if it creates better synergies—this usually leads to more efficient sharing of resources in terms of infrastructure, procurement, and marketing. All possible options are being evaluated at this stage.”

AKTEL, the third-largest operator by subscription, made no official comment on this issue, but its top officials told bdnews24.com that they knew nothing of the matter.

Speaking on condition of anonymity, a former high official told bdnews24.com that the discussion had started one year back. As a result, share holders of the Banglalink and Aktel are now talking on this issue.

Meanwhile, the BTRC chief Thursday said he had no merger proposal on his desk.

“We have not got any such proposal yet. There is no bar here (to merge Banglalink with AKTEL) if the subscribers do not face any problem,” Bangladesh Telecommunication Regulatory Commission chairman Zia Ahmed told bdnews24.com.

Many international news outlets reported on Tuesday that the two cell-phone vendors were mulling over working jointly to put an end to chronic losses.

Nagib Sawiris, chairman of the Banglalink’s Egyptian owning company, Orascom Telecom, disclosed the issue in a discussion at World Economic Forum in Jordan on Tuesday.

Sawiris told the media that they were in discussions to combine their operation with Malaysia-based TM International that owns AKTEL to sustain in the Bangladeshi market.

He said it was not possible for all six mobile operators to make profit in a small market in Bangladesh.

According to BTRC data, Banglalink holds the second position in the market with 1.19 crore subscribers while AKTEL is in third position with 87 lakh.

Market leader Grameenphone, owned by Norwegian telecoms giant Telenor, has 2.20 crore customers or 46 percent of the total subscribers.

Market sources say Banglalink has been hemorrheaging for long, while AKTEL has recently made the balance sheet look better after changes in the top management.

Source: bdnews24