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Sri Lankan Mobile Networks in Merger Talks

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Sri Lanka's overcrowded mobile market may see some long expected consolidation with reports that Malaysia's Axiata Group and India's Bharti Airtel are looking to merge their local subsidiaries.

Dialog Axiata is reported to have contacted the regulator last week confirming that it is looking to merge with Airtel Lanka.

If approved, the merger would see Dialog's 10.5 million customers merged with Airtel's 2.3 million customers, giving the combined company a market share of around 50%.

The country has six mobile networks, although the only other competitor with significant market share is Sri Lanka Telecom's mobile arm, Mobitel, which has 22 percent of the market.

Moves by the government to impose minimum tariffs has also reduced the ability of the smaller networks to compete on price, which was expected to spark a wave of consolidation.

However, the consolidation was expected between the smaller networks, not the big players, and the local Competition Commission may require additional concessions to preserve choice in the market.

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Tags: bharti airtel  axiata group  Sri Lanka