A year after proposing a partnership, Axiata Group and Bharti Airtel finalized an agreement to merge their operations in Sri Lanka, reducing the market players to three.

A final agreement was signed by the parties, whereby Dialog Axiata would buy all the issued shares of Airtel Lanka. Dialog Axiata's strategic move in Sri Lanka is expected to make them a stronger player in the telecommunications industry. This will be achieved by increasing their market share and expanding their network infrastructure. Also, the merger will allow both companies to use their resources and knowledge to offer new and better services to customers in the country.

Dialog and Bharti Airtel agreed to merge in May 2023 by signing a legally binding term sheet.

Aside from meeting the requirements stated in the share sale agreement, which includes obtaining clearance from the Colombo Stock Exchange and ensuring compliance with various legal and regulatory procedures, the deal must also gain the consent of Dialog shareholders.

Sri Lanka's Telecommunications Regulatory Commission gave its approval to the proposed merger.

Axiata stated that the merger aims to achieve cost savings and operational efficiencies through leveraging economies of scale and reducing redundant infrastructure, ultimately benefiting the combined company.

According to GSMA Intelligence data, Dialog had 16.4 million connections at the end of March, while Airtel Lanka had roughly 3 million. Hutch Sir Lanka had 3.1 million connections at the end of Q1, compared to 8.3 million for number two Mobitel.