Axiata Group Berhad (Axiata) and Bharti Airtel will merge their telecom operations in Bangladesh, creating a new mobile operation with 40 million customers and number-two market share in the market, trailing only Grameenphone.

Upon completion, Axiata will hold 68.3 per cent controlling stake in the combined entity, while Bharti will hold 25 per cent. The remaining 6.7 per cent will be held by the existing shareholder, NTT Docomo of Japan.

The proposed transaction is subject to conditions precedent including receiving applicable approvals from relevant authorities and is expected to complete in the first half of 2016, according to a statement from Bharti Airtel.

Airtel Bangladesh has a subscriber base of nine million while Robi Axiata has 28 million subscribers.

Robi Axiata is currently the third largest telecom operator in Bangladesh, followed by Airtel. There had been six operators in Bangladesh. There will be five, after the merger.