Axiata Group Berhad (Axiata) and Bharti Airtel will merge their telecom operations in Bangladesh. Both companies have signed a definitive agreement to merge their subsidiaries in Bangladesh — Robi Axiata Limited (Robi) and Airtel Bangladesh Ltd (Airtel). Upon completion, Axiata will hold 68.3 per cent controlling stake in the combined entity, while Bharti will hold 25 per cent. The remaining 6.7 per cent will be held by the existing shareholder, NTT Docomo of Japan.

The proposed transaction is subject to conditions precedent including receiving applicable approvals from relevant authorities and is expected to complete in the first half of 2016, according to a statement from Bharti Airtel.

Airtel Bangladesh has a subscriber base of nine million, while Robi Axiata has 28 million subscribers. After the proposed merger, the combined entity will become the second-largest telecom service provider in Bangladesh in terms of number of subscribers. Robi Axiata is currently the third largest telecom operator in Bangladesh, followed by Airtel. There are six operators in Bangladesh with Grameenphone leading the list.

The proposed merger is set to strengthen the industry structure, competitiveness and, more importantly, bring greater benefits to customers in terms of network quality and coverage and an improved offering of data products and services.