Airtel-Warid deal changes market

By vision reporter

The acquisition of Warid Telecom by Bharti Airtel, officially confirmed on Tuesday, brings to a close months of speculation and the first in-country acquisition by another operator.

Market dynamics had always hinted at possible merger or acquisition by one or several players going forward as the market completely changed about three years ago at the peak of tariff wars and new market entrants.

A statement from Warid yesterday said “Warid has entered into a definitive agreement for acquisition of its Uganda telecom operations by Airtel” confirming Saturday Vision’s story.

The acquisition is a historical feat in one of Africa’s most vibrant telecom markets that now opens new dynamics for the industry. It means the new entity that will emerge from Warid and Airtel, should the two chose to go for a single brand image, will have a combined subscriber base of about 7.4 million, bringing them close to the current giant MTN’s 7.7 million as of 2012.

While MTN still controls more than 50% of the market and has been almost the only entity making profits in a tight industry, Warid and Airtel’s combined force can now afford the luxury and flexibility of opening a new market war as the two move neck to neck.

Bharti Airtel can also now exploit the new scale by pricing its products to enjoy volumes as opposed to selling to a few at a premium.

Mohammed Nahayan, a Warid Telecom Uganda board member, said the deal is a win-win for Warid customers, while Manoj Kohli, the chief executive of Bharti Airtel, said the agreement, which is also the first in-market acquisition in Bharti Airtel’s history, will translate into a healthier telecom sector in Uganda.

Workers at various Warid offices were this week alerted that they will have a new employer in a month or so, and that their jobs cannot be guaranteed, but no further information was given.