Dialog Axiata, Sri Lanka’s largest mobile network operator, which accounts for 57% of the country’s mobile market has joined hands with Airtel Lanka, one of the fastest-growing telecom service providers, with over 5 million customers in 25 administrative districts. According to companies, the deal is subject to the signing of definitive agreements and meeting necessary conditions, including regulatory and shareholder approvals. The proposed transaction involves Airtel being granted a stake in Dialog, representing the fair value of Airtel Lanka. Airtel will be issued new shares in Dialog upon completion of the transaction.
This announcement comes in the wake of Airtel announcing a strategic partnership with Bridgepointe Technologies, a tech advisory firm assisting mid-market and enterprise companies in optimizing tech investments and business results. This partnership enables US enterprises seeking to expand into India and Africa to leverage Airtel#39;s digital infrastructure solution. This move is expected to consolidate the telecommunications industry in Sri Lanka further and enhance the service offerings of both companies. It is believed that a merger with the market leader will propel Airtel Lanka from a minority player to becoming part of an entity that is the largest telecom operator in Sri Lanka.
The telecommunications sector in Sri Lanka is one of the country’s most dynamic sectors, contributing significantly, both directly and indirectly, to investment, employment, productivity, innovation, and overall economic growth. Sri Lanka’s telecommunication market has five mobile operators serving a population of 22 million. The country is targeting significant usage of shared solutions and digital services by the end of 2024. Industry experts believe the country will enter another wave of digital transformation, with 750 tech companies, 1,000 IT start-ups, and 500 other technology-related start-ups in place by 2024.
Telecommunications, computers, and information services are key growth components in Sri Lanka. The National Export Strategy of Sri Lanka aims to generate $5 billion in revenue, creating 200,000 direct jobs and establishing 1000 Information Technology and Business Process Management (IT-BPM) startups via the IT-BPM industry by 2025. Sri Lanka’s information technology and business services sector is the country’s fourth largest export earner with over 300 companies currently serving several industry verticals. Broadly, it is segmented as Information Technology (IT) and Information Technology enabled Services (IT/ITeS). The industry closely adheres to global labor and environmental standards.