Bangladesh's telecoms authority approved an initial investment of $300 million (Dh1.1 billion) by Bharti Airtel in No4 Bangladesh mobile company Warid Telecom, with the leading Indian telecoms firm expected to pay more later.
Bangladesh's Daily Star newspaper last month reported the final deal could be worth $900m, citing officials at Warid, which is controlled by Abu Dhabi Group.
UAE-based Abu Dhabi Group, a consortium of investors from Abu Dhabi, will retain the rest of Warid.
In December, an Abu Dhabi Group official said his firm expects to closed the deal in mid-January. Bharti's move to buy Bangladesh's Warid Telecom is seen as a shift in focus to smaller targets after its planned $24bn merger with South Africa's MTN failed.
At the end of October, Warid had 2.8 million subscribers – far fewer than rival Grameenphone, majority owned by Norway's Telenor.
Egyptian Orascom Telecom's Banglalink and Telekom Malaysia's Aktel also operate in the country. Warid Bangladesh began operations in 2007.
Bharti's expansion would give the Indian phone leader access to Bangladesh's rapidly growing mobile sector at a time when it is locked in an intense price war in India with rivals Reliance Communications and Vodafone Essar. "We've asked Warid to submit schedule of the Bharti's $300m initial investment plan within 30 days," said Ahsan Habib, Director-General of Bangladesh's telecom regulator yesterday. He said the money must be spent on network expansion.
A spokesman from Bharti in New Delhi did not immediately respond to a request from Reuters for comment.
A regulatory official in Dhaka said the $300m was an initial payment and Bharti could pay more for a 70 per cent stake in Warid Bangladesh. Details of the total deal value were not announced, but the official said Bangladesh hoped Bharti would cross $1bn over the next few years.
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