Bharti Airtel to buy 70% in Warid Telecom, to invest $300 million

The purchase will make Bharti the newest foreign company to make inroads into the fast-growing Bangladeshi mobile market

Bharti Airtel Ltd, India's number one cellular operator on Tuesday received the nod from Bangladesh's telecom regulator to purchase 70% stake in Warid Telecom and to invest $300 million in the company.

"The Bangladesh Telecommunication Regulatory Commission (BTRC) has approved Airtel's proposed $300 million investment to buy Abu Dhabi group's 70% stake in Warid Telecom," BTRC chairman Zia Ahmed said. A Bharti Airtel spokesperson said that the company will keep pursuing international opportunities.

This deal will enable Bharti Airtel to enter the lucrative neighbourhood market. The nod comes after six months of pursuit since the Abu Dhabi group put its stake on sale.

Mr Ahmed said that Airtel would take over 70% stake in Warid by creating new shares possibly at a nominal price.

"The BTRC has given the go-ahead to transfer Abu Dhabi group's shares in Warid Telecom to Bharti Airtel," Mr Ahmed said.

The purchase will make Bharti the newest foreign company to make inroads into the fast-growing Bangladeshi mobile market. Launched in 2007, Warid has nearly three million subscribers in Bangladesh.

Bangladesh has till October 2009, 52 million mobile subscribers, a number expected to rise to 100 million by 2015.

Airtel is the fourth foreign company to enter the Bangladesh market. Egyptian mobile operator Orascom has taken over Sheba while Singapore's State-owned Singtel has bought 45% stake in Bangladesh Telecom.

Airtel's move into Bangladesh's market comes after its plan to buy a stake in South Africa's MTN collapsed in September last year as Pretoria said that such a merger could lead to MTN losing its national character.

Warid is the sixth-largest mobile phone operator in Bangladesh and has so far invested $600 million in its business.

Zia Ahmed said "We hope Airtel's investments would cross $1 billion in the next few years."

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    Small, green cars set to rule at Auto Fair

    Close to two million auto enthusiasts and business visitors are expected to throng the expo, which is about to witness 50 new launches, including 10 global forays

    Global automobile giants converged in New Delhi as the 10th edition of the Auto Expo opened on Tuesday, rolling out an array of cars, mostly small ones with a green theme, reports PTI.

    In the world's second fastest-growing economy, commercial vehicle manufacturers too want their pie of the market and will unveil their product lines during the week-long auto fair, billed as the biggest in the world in terms of footfalls.

    Close to two million auto enthusiasts and business visitors are expected to throng the fair, which is about to witness 50 new launches, including 10 of them global.

    Giants like Toyota, Honda, Suzuki and General Motors are all here but most of them are unveiling their small and concept cars, high on fuel efficiency.

    "The Indian Auto Expo has been gaining stature with international original manufacturers launching their global models as they do in other auto shows in the world," Society of Indian Automobile Manufacturers (SIAM) president Pawan Goenka said.

    Honda and Toyota launched their concept small cars with an eye on the growing Indian market. They also want to use India as their global manufacturing hub, mostly for small cars. Toyota unveiled its concept small car 'Etios' specially developed for the Indian market. The company which has a joint venture with the Kirloskar Group, is investing around Rs3,200 crore to set up its second manufacturing facility in Bengaluru to roll out the car by early 2011.

    "Our tagline represents the choice of India for the global premiere of the Etios concept, following which, export to other countries will be evaluated," Toyota Motor Corp vice chairman Kazuo Okamoto said.

    He said the Indian market, expected to grow to four million units by 2015, is important for the Japanese auto major.

    Maruti Suzuki unveiled a small multi-purpose concept vehicle (MPV) as India's number one car manufacturer wants to create a new segment. The concept vehicle has been developed by Maruti Suzuki at its research and development centre.

    German auto major Volkswagen introduced its small 1.2-litre car Polo with a promise to launch the sedan version on the same platform in the second half of this year. "The Polo stands for German engineering and top technology. It is a lively young cosmopolitan made-in-India car," Volkswagen AG member of the board of management Jochem Heizmann said.

    Two-wheelers were not to be left behind. Iconic US motorcycle maker Harley-Davidson announced a plan to bring 12 motorcycles in the Indian market priced between Rs6.95 lakh and Rs34.95 lakh (ex-showroom New Delhi).

    Munjals-promoted Hero Electric launched three electric scooters priced between Rs17,900 and Rs32,796.

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    Companies & Sectors   Exclusive
    'Coal supply shortage will not affect power projects'

    GMR group unit GMR Energy is investing around Rs18,000 crore over the next three years to add electricity generation capacity and become a 3,300MW company. Raaj Kumar, chief executive officer and director, GMR Energy, talks with Moneylife’s Amritha Pillay about the coal supply situation in the country

    Amritha Pillay (ML): Coal-producing regions in India are facing some serious problems like the Naxalite insurgency. Coal India Ltd (CIL) has admitted that it has been unable to transport coal from its mines from Jharkhand and Orissa. GMR Energy has also been allotted a block in Orissa. Do you think that the Naxalite movement poses serious problems for India’s coal production?
    Raaj Kumar (RK):
    The government is handling the Naxalite problem in a systematic manner. From the current situation to the time we will extract our first coal ingot from our Orissa mine, there is plenty of time. We hope by that time, the Naxalite problem will get resolved. Also, the country needs coal for power projects. This is linked with development, so there may not be any roadblocks.

    As far as GMR is concerned, we do not foresee any problems in developing the Orissa mine and transporting the coal from these blocks to other places.

    ML: What is the current status of the Orissa coal block allotted to GMR Energy in 2008? Will the delay in coal mining affect your power projects?
    For the Orissa coal block, we have already formed a joint venture company. Usually for any mine, pre-development activities take around two-three years’ time and we need a number of clearances like forest, exploration and environmental clearances. The process is going on. As far as our power project is concerned, the work is going on as per schedule. Since we have sufficient coal linkages in place, our power projects will not be affected due to delay in coal mining at the Orissa block.

    ML: State-run CIL has been trying to ensure continuous coal supply across the country. Do you think CIL’s efforts are enough?
    CIL is looking to import substantial quantity of coal from abroad, so I think these steps would take care of coal supply in the medium to short term. However, I personally feel that CIL should seriously think of improving its productivity and also undertake more underground mining.

    ML: A number of power companies have raised money from the capital market for expansions. But do you think that these companies have overlooked problems like the coal supply shortage?
    We have been hearing that there is a coal shortage. However, with all the action that CIL is undertaking, inclusive of the support from imported coal, coal shortage is a temporary problem and I am sure coal shortage will not come in the way of power projects.

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