Business

Mobitel, Dialog welcome Hutch-Etisalat merger

– Mobitel unconcerned about Hutch catching up

– Says open to merger of its own

By Madhusha Thavapalakumar

Even though the recent merger with Etisalat increased Hutch’s market share in Sri Lanka and reduced its gap against second-placed Mobitel, the latter says it welcomes consolidation in the industry.

Speaking to The Sunday Morning Business Mobitel CEO Nalin Perera said that five operators were too many for Sri Lanka.

“Sri Lanka is a small market. I think five operators are far too many. Consolidation is a good thing that should happen.”

The long-pending telecommunication merger was completed with Hutchison Telecommunications Lanka (Private) Limited (Hutch Lanka) acquiring 100% shareholding of Etisalat Lanka (Private) Limited on 30 November, 2018.

The deal enables CK Hutchison Holdings Limited Group to have a majority and controlling stake of 85%, whilst the Etisalat Group will have 15% ownership of Hutch Lanka.

This deal has solidified Hutch’s position at third place in terms of share in the Sri Lankan mobile telecommunications market, with its lead over fourth-placed Airtel now over 8%. However, it remains far behind second-placed Mobitel, which has a 28.1% share. Dialog is comfortably placed at the top of the table with a 44.5% market share.

When contacted, Dialog Axiata PLC Group Chief Executive Supun Weerasinghe said consolidation would enhance business viability.

“As Sri Lanka’s premier connectivity provider and largest mobile operator, Dialog Axiata welcomes consolidation within the telco sector. Consolidation will enhance business viability and we encourage optimum allocation of scarce resources”

Nalin Perera said that Mobitel was open to a merger with one of the other players in the market.

“A merger can always happen. We will look at the options available in the market. We are open to any kind of merging.”

He also said that Mobitel is in the midst of a major expansion and that it does not consider itself the second player.

“I do not consider us the second player. I would say we are a formidable player in the mobile industry. Every effort will be taken to maintain our position.

“We are in the process of improving the network quality. We are in the process of conducting one of the biggest network expansions in Mobitel history, where we are investing $ 100 million, where the rollout has already started, and we hope to complete it by early next year. With that, we will have 4.5G covering 95% of the country.”

Currently, the estimated subscriber base of the four remaining players in the industry are 13.4 million for Dialog, 8.4 million for Mobitel, 5.3 million for Hutch, and 2.9 million for Airtel.