New Delhi: On Tuesday, Bharti Airtel Ltd finally closed out its long-awaited takeover of a 70% stake in Bangladesh’s Warid Telecom International Ltd from its holdings company, the Dhabi Group.

The deal enables Bharti to enlarge its regional footprint, while the Dhabi Group says such partnerships are a crucial aspect of its larger business model. Both companies expect the deal to contribute substantially to the growth of Warid Telecom, Bangladesh’s fourth largest operator.

Growth plans: Bharti CEO and joint MD Manoj Kohli says the company will definitely look at other emerging markets outside Saarc. Harikrishna Katragadda / Mint

In an interview, Manoj Kohli, joint managing director and chief executive of Bharti Airtel, and Bashir Ahmed Tahir, the chief executive of Dhabi Group, spoke about how the new partners will utilize the deal to expand Warid Telecom and add to their own revenues. Edited excerpts:

How much has Bharti paid the Dhabi Group for this stake?

Kohli: Firstly, we are delighted to have signed this agreement with the Abu Dhabi Group to acquire 70% stake in Warid Telecom Bangladesh. Warid Group will continue to have 30% stake in the company. So the entire consideration of 70%—$300 million (around Rs1,362 crore)—will go into Bangladesh, into the markets, for network rollout, for distribution roll-out, new services, innovations, etc.

So very frankly, the entire money—the entire consideration—will go towards market development. We believe that Bangladesh has 160 million population, and 32% penetration. Being so low, this is the right market for Bharti Airtel to grow its brand.

What targets are you setting in terms of rolling out and ramping up a network? Does the Warid network already have 3G (third-generation) capability?

Kohli: We will, in the next six-eight weeks, finalize the plan of action and we will definitely roll out very, very rapidly and touch the hearts of Bangladeshi customers through our brand, our innovations, through our new services, our value-added services, etc. So I think by March, we will have finalized all our action plans.

You are already in Sri Lanka. This deal makes you the only South Asian telecom player. Are you looking to expand globally?

Kohli: Our first priority was to cover Saarc (South Asian Association for Regional Cooperation)—India and Saarc. Now India and the adjoining markets are fully covered. Beyond that, we will definitely look at other emerging markets outside Saarc.

Does the Bangladeshi regulatory atmosphere allow you to acquire any other operator? Are there any fresh licences that the Bangladesh regulator plans to auction?

Kohli: See, Bangladesh is definitely planning 3G auctions later this year.

And Warid is going to be a participant in that?

Kohli: Yes.

What sort of imperatives were involved in this deal for the Dhabi Group?

Bashir: If you look at out group profile, we are basically not telecom operators. We are investors, by and large, and our focus is on the financial side, on the banking side, on insurance. We own two banks in Pakistan and one in Abu Dhabi and one in Georgia.

On the telecom side, this is our second phase. We are going from the operator to investor mode. So, that is what we have done. In Africa, we have brought in new partners—Essar are our partners in Africa, they have 51%, we have 41% there. Similarly, in Bangladesh, we have brought in Bharti, and in Pakistan we have brought in SingTel. This is how we are moving into the next stage of our investment in telecommunications.

You have invested up to $680 million in this company already. Bharti plans to invest another $300 million. What are you getting as investors?

Bashir: No no no... you are more focused on the financial side... Actually, every transaction is not based on “you buy shares, you sell shares". Our transaction is not based on that. Our transaction is that we have brought the company to this level, in two years’ time. So this is the stage from which you will now expand. So our transaction is not based on sale and purchase of shares, but on the future of the company.

They (Bharti) are not only investing $300 million. They will also drive the expansion programme—first and second phase expansion. So that will be the investment coming from Bharti. Ultimately, it is a phased programme which you will see once we have shown the agreement to the government. But this is a unique transaction.

The Bangladesh regulator made a statement saying Bharti Airtel has promised an investment ramp-up of $1 billion over three-five years.

Bashir: Yes, this is what I’m saying... that this is what will come... In the next stage we will submit a business plan to the regulator. That is being prepared. I cannot tell you what exactly is in this business plan, but we will be submitting this business plan and that will give a road map of how we are going to get to that next level.