GrameenPhone Gets Green Light for IPO

Grameenphone , Bangladesh's leading mobile operator, has received clearance for its IPO from the Securities and Exchange Commission of Bangladesh, and will be moving fast to fulfill the necessary conditions and formalities ahead of the rights issue, which is set to raise $65 million.

The offering has changed from the original 2008 proposition, as the SEC has imposed a change in the face value of each share, raising it from 1 Bangladesh Taka (US$0.01) to BDT10 ($0.10). In addition, GrameenPhone's current shareholders raised the size of the total offer from 8.95 percent to 10 percent. This includes the pre-IPO offering, which has already been conducted and raised $60 million.

Telenor ASA (Nasdaq: TELN) holds 62 percent of the current share base, while the not-for-profit Grameen Telecom, which was founded by Nobel Peace Prize winner Muhammad Yunus, holds the balance. The shares for the IPO will come in part from a new share offer and also from a proportional split from the two current stockholders.

Following the IPO, Telenor will hold 55.8 percent and Grameen Telecom 34.2 percent, a Telenor spokesperson confirms.

The IPO was originally announced in July 2008 but was postponed in October due to the global economic downturn. The exact timing of the IPO has not yet been revealed, but there is no intention to delay, and the timing is now being dictated by logistical issues such as printing a new prospectus, the Telenor spokesperson tells Light Reading Asia.

GrameenPhone's decision to join the public market when the global economy is struggling has been influenced by a desire to support the Bangladesh economy. "GrameenPhone is so important in Bangladesh. We are the biggest telco and biggest tax payer, and we are serious in our support for the Bangladesh stock market," says the spokesperson.

Overall, the Bangladesh mobile market had 48.88 million subscribers at the end of the first quarter, giving it a penetration level of 30 percent, according to Wireless Intelligence .

GrameenPhone operates a GSM and EDGE network. It had just over 21 million subscribers at the end of the first quarter and has 47 percent of the national market, according to the operator's own figures. It had a lead of 10 million subscribers over its nearest competitor, Orascom Telecom 's Banglalink, in the first quarter. However in that quarter, Axiata Group Berhad 's Aktel, Banglalink, and Warid Telecom International Ltd. , which is owned by the UAE's Dhabi Group, all took larger shares of the net additions than the country's No. 1, according to Wireless Intelligence.

Despite this, Telenor's CEO, Jon Fredrik Baksaas, highlighted the strength of its Bangladesh operation when giving Telenor's first-quarter results. GrameenPhone has managed to raise its average revenue per user (ARPU) from 22 Norwegian Kroner ($3.43) in the first quarter of 2008 to NOK25 ($3.90) during the same period this year. It has also increased its operating profit from NOK289 million ($45.15 million) in the first quarter of 2008 to NOK530 million ($82.77 million) in the same period this year. (See Telenor Posts Q1).

Telenor was unable to give details about how the funds raised from the IPO would be used. However, building new 3G networks is on the agenda for GrameenPhone. The government had promised 3G in March this year, but it is still to issue the appropriate licenses. GrameenPhone has already planned to deploy HSPA, according to the GSM Association (GSMA) .

— Catherine Haslam, Asia Editor, Light Reading