Etisalat enters Sri Lanka
UAE operator strengthens position in Asia with acquisition of Tigo Telekom
UAE operator Etisalat has gained entry into the Sri Lankan telecom sector by acquiring mobile operator Tigo Sri Lanka for $207 million, from Millicom International Cellular.
Tigo Sri Lanka started operations in 1989 and is now Sri Lanka's second biggest mobile operator, with a market share of 21% and about 2.25 million subscribers.
The company competes with four other mobile operators, market leader Dialog Telekom, Sri Lanka Telecom, Hutchison and Bharti Airtel.
Despite fierce competition, most analysts agree that there remains plenty of room for growth in Sri Lanka's mobile sector, which has a penetration rate of just 52%.
Etisalat will also be able to offer 3G services in the country, as Tigo Sri Lanka was licensed to offer 3G services in March 2009.
The acquisition appears to fit Etisalat's strategy of gaining a foothold in countries across Asia. The company already has investments Pakistan, Afghanistan, Indonesia and India.
Etisalat chairman Mohammed Hassan Omran said that entering the Sri Lankan telecom market was "a logical addition" to the company's interests in Asia.
"The acquisition promises attractive returns as the Sri Lankan government is increasing its effort to promote foreign investment in all sectors," he said.
Omran added that the acquisition would also provide opportunities for "synergies" with Etisalat's operations in the UAE, Saudi Arabia and India, suggesting that the company might plan special tariffs for customers calling expatriate family and friends in those countries.