Dhaka: Bangladesh’s telecom authority approved an initial investment of $300 million by Bharti Airtel in No. 4 Bangladesh mobile company Warid Telecom, with the leading Indian telecom firm expected to pay more later.
Bangladesh’s Daily Star newspaper last month reported the final deal could be worth $900 million, citing officials at Warid, which is controlled by Abu Dhabi Group.
Bharti’s expansion would give the Indian phone leader access to Bangladesh’s rapidly growing mobile sector at a time when it is locked in an intense price war in India with rivals Reliance Communications and Vodafone Essar.
“We’ve asked Warid to submit schedule of the Bharti’s $300 million initial investment plan within 30 days,” Ahsan Habib, director general of Bangladesh’s telecom regulator, told Reuters on Tuesday.
He said the money must be spent on network expansion.
A spokesman from Bharti in New Delhi did not immediately respond to a request from Reuters for comment.
A regulatory official in Dhaka said the $300 million was an initial payment and Bharti could pay more for a 70% stake in Warid Bangladesh.
Details of the total deal value were not announced, but the official said Bangladesh hoped Bharti’s investment in Warid would cross $1 billion over the next few years. He did not wish to be named as he was not authorised to speak to the media.
UAE-based Abu Dhabi Group, a consortium of investors that includes members of the royal family of Abu Dhabi, will retain the rest of Warid.
In December, an Abu Dhabi Group official said his firm expects to closed the deal in mid-January.
Bharti’s move to buy Bangladesh’s Warid Telecom is seen as a shift in focus to smaller targets after its planned $24 billion merger with South Africa’s MTN failed.
At the end of October, Warid had 2.8 million subscribers -- far fewer than rival Grameenphone, majority owned by Norway’s Telenor. Egyptian Orascom Telecom’s Banglalink and Telekom Malaysia’s Aktel also operate in the country.
Warid Bangladesh began operations in 2007.
Bangladesh’s mobile sector has grown rapidly, with the number of users now topping 51 million, from 200,000 in 2001, helped by low penetration levels, competitive tariffs and steady economic growth. Analysts expect the subscriber base to top 70 million by 2011, nearly half the country’s population of 150 million.