Robi-Airtel merger may be delayed

BTRC now seeks assurances of payments of dues from operators before it recommends merger

Muhammad Zahidul Islam

The telecom regulator has sought certain assurances from Robi and Airtel before it makes its recommendation to the government about their merger, a move that is likely to delay the closing of the deal further.
Bangladesh Telecommunication Regulatory Commission sent a joint letter to the two mobile operators on October 13 where it outlined its concerns about the impending merger, which will make the combined entity the country's second largest carrier.
“We will spend some time on the merger application before we send our recommendation to the government. We need some assurances and documents,” said a senior official of the BTRC.
The BTRC asked for a guarantee from Robi that it would pay all the dues including value-added tax, corporate tax and other charges payable by Airtel to the regulator and the government.
It also wanted assurance that none of the employees of the two companies will be forcefully retired or have their contracts terminated after the merger.
Recently, some senior executives of Airtel wrote to the government and the regulator expressing their concern about their job security.
The regulator also wants assurance from both the operators that customer service will not be disrupted.
Robi and Airtel have until the end of this month to provide the written assurances to the regulator.
The two operators will soon be sent another letter asking for the new entity's roadmap, said a senior official of the BTRC's legal and licensing division.
Earlier on September 17, the two operators jointly sought permission from the telecom regulator to merge their operations in Bangladesh.
In a letter, the chief executive officers of Robi and Airtel said they want to match the dominance of Grameenphone in the country's telecommunications landscape.
“We firmly believe that integration of our mobile operations will invigorate and transform the communication market in Bangladesh currently dominated by a single strong service provider.”
It is imperative for competition-enhancement and long-term sustainability of the communication market in Bangladesh so that this dominance is matched by other competitors with sufficient resources, the CEOs said in the letter.
As of August, Robi's customer base stood at 2.83 crore and Airtel's around 93.92 lakh. The combined entity will have the second largest subscriber base in Bangladesh. Grameenphone, the largest operator, has 5.5 crore subscribers. Grameenphone currently has 32 megahertz of spectrum, while the combined spectrum of Robi and Airtel will be 39 MHz.
Robi will have 75 percent holdings in the merged entity and Airtel the rest, according to the application.
Malaysia-based Axiata has 91.59 percent shares in Robi, which will be diluted to 70 percent after the merger. The shares of Japan's NTT Docomo in Robi will be diluted to 5 percent from 8.41 percent now. On September 9, Robi and Airtel made public their ongoing merger talks.
Welcoming the merger, Sunil Kanti Bose, the outgoing chairman of BTRC, at a press conference on Wednesday said there should be a maximum of four operators in a country like Bangladesh. “Six operators will not sustain here. So, the other operators need to merge for their survival.”

State banks pass hard times as loan growth stalls

Sajjadur Rahman

State-owned commercial banks are struggling to get new business in a market that is becoming increasingly competitive, data from Bangladesh Bank shows.
The advance-to-deposit ratio (ADR), which compares all loans to all deposits, of Agrani, BASIC, BDBL, Janata, Rupali and Sonali banks, has gone down below 52 percent indicating that these banks will not be able to earn as much as they could.
By contrast, the average ADR of 39 private commercial banks stood at over 76 percent on August 27, while it is nearly 60 percent for nine foreign banks and over 80 percent for Islamic banks, data shows.
The gap between deposit and credit growth of these six banks has also widened and crossed over 10 percentage points on August 27.
Deposit grew by 14.55 percent and credit by only 4.48 percent year-on-year in August.
“We are not getting good clients who prefer quality services provided by the private and foreign banks,” said a senior official of Sonali.
Sonali's loan growth has almost stalled at 0.46 percent against the industry's (56 banks) average growth of 11.62 percent.
“We have a difficult time persuading potential customers to get loans from us,” said an official of Sonali's corporate branch in Motijheel.
Although the situation of Agrani, Janata and Rupali is better than Sonali, they are also struggling to make business.
Agrani's credit grew by 7.73 percent and deposit by 20.63 percent. Janata's credit growth was 9.41 percent against deposit growth of over 14 percent.
Rupali looks different among these six banks as its credit growth -- 20 percent -- was higher than deposit growth -- 13 percent.
On the other hand, troubled BASIC Bank has witnessed over 18 percent negative credit growth.
Also, the bank's deposits grew by less than 1 percent.
“Overall investment is yet to pick up. When the implementation of mega projects will get momentum, demand for credit will go up,” said Zaid Bakht, chairman of Agrani Bank.
State banks have some disadvantages compared to private banks that can grab customers from state banks by offering low rates, he said.
“State banks cannot cut lending rates to the level of private banks as their nonperforming loans are higher,” said Bakht, also an economist.
On Agrani's higher deposit growth than credit, Bakht said they are trying to get low-cost deposit instead of high-cost fixed deposits.

Adele's comeback song “Hello” releases

Adele is back with her first single in three years. “Hello”, a soaring new ballad that offers the first taste of the British singer's highly anticipated third album “25”.
The chorus features Adele's signature soaring vocals as she sings, “Hello from the other side / I must have called a thousand times / To tell you I'm sorry for everything that I've done.” Accompanied by a piano and drums for most of the track (which was produced by Greg Kurstin and recorded in Los Angeles), the song's last act is filled out with orchestral bells and big, ambient synths.
Adele has been in something of a career hibernation since the birth of her first child in 2012. “Hello” is the Grammy winner's first release since her 2012 recording “Skyfall” from the James Bond film of the same name reached No. 8 in the US and No. 2 in the UK.
That wait will officially come to an end November 20 when Adele's album “25” arrives. Adele announced the big news on Wednesday, days after publishing a Twitter letter in which she told her fans, “I'm sorry it took so long, but you know, life happened.”
The video for “Hello” was directed by Canadian filmmaker Xavier Dolan.
Source: Billboard