Telecom service provider Bharti Airtel is likely to exit from Sri Lankan mobile market by selling its business to Etisalat.
Hindu Business Line reported that negotiations between Bharti Airtel and Etisalat have advanced to final stages.
An announcement from Airtel is expected before the return of Manoj Kohli, managing director and chief executive officer (International) of the company, in January to India. Kohli is also in-charge of the company’s operations in Africa, Bangladesh and Sri Lanka.
Bharti Airtel, which launched its Sri Lanka operations in 2009, has less than two million users in the country. Airtel has invested over $300 million to roll out services in Sri Lanka but continues to make losses.
In Sri Lanka, Airtel operates across 25 administrative districts with distribution network of over 41,400 retailers. Airtel, which did not bid for 4G spectrum, offers 3.5G services which are present across major towns in Sri Lanka.
Its fate in Bangladesh is also not different. However, Bharti Airtel has followed a different strategy in Bangladesh. It acquired a 70 percent stake in Warid Telecom in January 2010 and increased the stake to 100 percent recently. Also, Airtel Bangladesh recently launched 3G services there. Bangladesh market is dominated by Grameenphone. Despite serious marketing plans, Airtel could not make any headway in Bangladesh.
Airtel does not share specific revenue details from Sri Lanka.
The revenue of Airtel from Sri Lanka and Bangladesh was $72 million in the September quarter of 2013, up 36 percent. EBITDA was $7 million. During the September quarter, Bharti Airtel invested $21 million towards capital spending (Capex) in Bangladesh and Sri Lanka.
The total investment of Bharti Airtel in Bangladesh and Sri Lanka till the September quarter of 2013 was $982 million.
Bharti Airtel’s Sri Lankan journey did not meet with success. Airtel did not participate in the auctions held earlier this year for 4G LTE spectrum in the Sri Lankan market.
Etisalat is currently the third largest player with nearly five million subscribers.