Airtel and Dialog’s Sri Lankan merger to create mobile market powerhouse


The combined entity would control around two-thirds of the Sri Lankan mobile market

This week, Dialog Axiata and Bharti Airtel have announced their intention to merge their respective Sri Lankan units.

Financial terms of the deal were not disclosed, though the announcement notes that Airtel will receive new shares in Dialog as part of the deal.

Dialog is already the current mobile market leader in Sri Lanka, with its roughly 18 million customers representing around 60% of the total market. Airtel Lanka, meanwhile, is the country’s second largest mobile player, with roughly 5 million subscribers.

Thus, if combined, the resulting entity would serve around 23 million customers, almost two thirds of the country’s 36.18 million mobile connections in 2023.

The merger still requires shareholder approval from both companies and will be subject to the typical regulatory oversight.

Hutch and SLT-Mobitel fill out Sri Lanka’s mobile tetrarchy, with Hutch having acquired the market’s fourth place player, Etisalat Sri Lanka, back in 2018.

This is not the first time that Dialog and Airtel have looked to join forces in Sri Lanka. The pair first entered merger discussions back in 2016. At the time, Airtel was a much smaller player in the Sri Lankan market, with the deal expected to carry a price tag of only around $100 million. Ultimately, however, a deal could not be reached.

The merger comes at an interesting time for Sri Lanka on a macroeconomic level. The country has been facing an economic imbalance for many years, with imports far outweighing exports and draining the nation’s foreign currency reserves. In recent years, coupled with the economic fallout of the coronavirus pandemic, the situation has frown to a full-blown crisis, with soaring inflation driving public protests to overthrow the civilian government last year.

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