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Sri Lanka's Telecom Landscape Set to Change as Dialog and Airtel Merge

Dialog Axiata and Bharti Airtel have agreed to merge their Sri Lankan operations, creating a stronger entity with wider network coverage and potentially lower costs for consumers.

Sri Lanka's Telecom Landscape Set to Change as Dialog and Airtel Merge

Get ready for a shakeup in Sri Lanka's telecommunications industry! Dialog Axiata PLC, the country's largest mobile operator, and Bharti Airtel Limited, India's leading telecom giant, have signed a definitive agreement to merge their Sri Lankan operations. This landmark deal, announced on April 18, 2024, promises to bring significant changes to the telecom landscape, impacting both companies and consumers.

 

Under the terms of the agreement, Dialog will acquire 100% of the issued shares in Airtel Lanka. In exchange, Bharti Airtel will receive ordinary voting shares representing 10.355% of Dialog's total issued shares. This share swap effectively integrates Airtel Lanka's operations into the larger Dialog network.

 

The deal, however, is not yet set in stone. It requires approval from Dialog's shareholders and must navigate regulatory hurdles, including clearance from the Colombo Stock Exchange (CSE). Thankfully, the Sri Lankan Telecommunications Regulatory Commission (TRCSL) has already given its nod, signifying its support for increased telecom service adoption across the country.

 

This consolidation promises a win-win situation for both companies and consumers. Here's how:

  • Economies of Scale and Reduced Duplication: By merging operations, Dialog and Airtel can eliminate redundant infrastructure and streamline processes, leading to significant cost savings.
  • Synergy in Technology and Investment: Combining resources allows the merged entity to invest more strategically in cutting-edge technologies and network upgrades, ultimately benefiting customers with faster broadband speeds, improved voice clarity, and a wider range of value-added services.
  • Enhanced Customer Experience: With a larger network footprint and potentially lower operational costs, the merged entity can offer more competitive pricing plans and potentially introduce innovative service packages.

 

Industry leaders are optimistic about the merger's potential. Vivek Sood, Group CEO and Managing Director of Axiata Group Berhad, believes it will "create value for shareholders" and aligns with Axiata's strategy of market consolidation. Hans Wijayasuriya, CEO of Telecommunications Business and Group Executive Director of Axiata, sees the merger as a boon for Sri Lanka's telecom sector, fostering "growth and sustainability."

 

Gopal Vittal, MD & CEO of Bharti Airtel, expressed confidence that Sri Lankan customers will benefit from the "seamless network" and "cutting-edge services" offered by the merged entity. Ashish Chandra, CEO of Bharti Airtel Lanka, echoed this sentiment, highlighting the opportunities for "innovation and growth" that the merger unlocks.

 

While the official merger is still pending, the news has sent ripples through the Sri Lankan business community. The potential for a more robust and competitive telecom sector is exciting, particularly for consumers who might see a wider range of choices and potentially more affordable mobile plans.

 

Here are some lingering questions:

  • How will the merged entity handle brand integration? Will both Dialog and Airtel branding remain, or will a new brand emerge?
  • How quickly will the network integration take place? Will there be any disruptions in service during the transition period?
  • What impact will the merger have on jobs within both companies?

 

These questions will likely be addressed in the coming months as Dialog and Airtel navigate the regulatory approval process and finalize their integration plans. One thing is certain: Sri Lanka's telecommunications landscape is on the cusp of significant change, and consumers have a lot to look forward to in the future.


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