Wednesday, Dec 16, 2009


 
 
   (Adds executive's comments, background and context) 
 
   By R. Jai Krishna 
   Of DOW JONES NEWSWIRES

NEW DELHI (Dow Jones)--Bharti Airtel Ltd. (532454.BY) is looking to enter Bangladesh and other South Asian markets as India's biggest mobile-phone operator by number of subscribers seeks to boost growth which has been hurt by stiff competition in the local market.

"We have been interested in Bangladesh because we have an interest in countries in the SAARC (South Asian Association for Regional Cooperation) region," Akhil Gupta, deputy group chief executive and managing director at Bharti Enterprises, told reporters on the sidelines of an industry conference.

Bharti Enterprises is the parent of Bharti Airtel. The SAARC region includes India, Pakistan, Bangladesh, Nepal, Bhutan, Sri Lanka and Maldives.

Gupta, however, declined to comment on a media report that Bharti Airtel is looking to buy a 70% stake in Warid Telecom's Bangladesh unit from its Abu Dhabi-based owners.

India's telecom market--the fastest growing in the world in terms of subscriber additions--is witnessing intense competition, which is driving down tariffs, hurting revenue and margins of service providers.

Bharti Airtel has been looking overseas for expansion to beef up growth. The company has twice failed to seal a merger deal with South Africa's MTN Group--the latest bid earlier this year falling through due to regulatory hurdles.

In a separate statement, Bharti Airtel said: "We keep evaluating international expansion opportunities from time to time."

Earlier Wednesday, Bangladesh's The Daily Star newspaper said--citing the country's telecom regulator--that the Indian company has sought an approval to buy a 70% stake in Warid Telecom's Bangladesh unit.

"I can't talk about that unless something official happens," Bharti's Gupta said.

The Daily Star report quoted Zia Ahmed, chairman of Bangladesh Telecommunication Regulatory Commission, as saying that the regulator has also received a letter from the Dhabi Group that said it wants to sell a 70% stake in Warid Telecom in Bangladesh.

Officials at Bangladesh Telecommunication Regulatory Commission, the Dhabi Group or Warid Telecom's Bangladesh unit couldn't be reached for comments.

As on October-end, Warid Telecom's Bangladesh unit was the fourth-largest operator in the country with 2.79 million subscribers. It trails leader Grameen Phone Ltd. with 22.30 million users, Orascom Telecom Bangladesh Ltd. 12.27 million and Axiata (Bangladesh) Ltd. with 10.99 million.

Consolidation In India Telecom Sector Inevitable

Gupta said also that the current price war in India is temporary and that consolidation in the telecom sector is "inevitable."

"The top 2-3 operators will have about 70%-75% market share, and after that, two operators will just be surviving, and below that, everybody will be struggling," he said.

Currently, India has between eight and 10 operators in each of the 22 service areas that the country is divided in, with some new players just starting operations.

Gupta reiterated that the intense competition will hurt the company's revenue and margins in the short term.

He, however, expects the company's minutes of usage to rise as customers talk more following the launch of per-second billing plans and cuts in roaming rates.

"There will be new revenue streams coming," Gupta added, referring to banking, money transfer, advertisements and other commercial services on mobile handsets. 


 
   -By R. Jai Krishna and Romit Guha, Dow Jones Newswires; +91-9967586928; romit.guha@dowjones.com

(END) Dow Jones Newswires

16-12-09 0818GMT