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Friday, May 22, 2009

Banglalink hints at merger

Banglalink hints at merger ; Sustaining competition is the goal: CEO

The Daily Star

Mobile phone operator Banglalink, owned by Egyptian Orascom Telecom Holdings, hinted yesterday in favour of a possible merger with AKTEL, saying consolidation is an option among many other strategies of the company to sustain in the competitive market.

"Except for the market leader, 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," said Ahmed Abou Doma, chief executive officer of Banglalink, in a statement.

His statement came following media reports about the merger issue, which was disclosed by Orascom Telecom Holdings Chairman Naguib Sawiris recently.Meanwhile, employees of both the operators are in a fear of possible job cuts amid talks for the merger.But Doma dismissed the speculation over job losses.

He said: "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 workforce and protect their interests. The resulting growth would require a bigger workforce and thus have a positive impact on the overall socio-economic scenario of the country.”

Now around 4,000 employees are working for the two companies.Explaining the recent merger developments, Doma said the telecom industry in Bangladesh is already crowded with too many operators. In most developed and developing countries there are not more than 2 to 3 operators, whereas in Bangladesh there are 6, he added.

Doma also pointed out that “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”.He said it is correct to point out that at this stage all strategic options are being reviewed that are not necessarily restricted to any one operator in particular.

"It's too premature to give any indication whatsoever regarding concrete details about the potential consolidation options and timelines at this stage," he said."Once our negotiations on different fronts that are being explored reach a more concrete stage, we will obviously share the proposition with telecom watchdog and other government entities concerned,” he said.Banglalink is yet to break even although it holds the market's second position with 10.90 million customers as of April 2009.

The operator's probable consolidation partner AKTEL holds the third position in the market with 8.83 million subscribers as of April.Telekom Malaysia International has 70 percent stake and Japanese NTT DoCoMo the rest in AKTEL.

At present, the top three operators -- Grameenphone, Banglalink and AKTEL -- hold more than 90 percent market share. Norwegian Telenor's majority shareholding company Grameenphone is in the number one position with 46 percent market share and 21.02 million customers as of April 2009.



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