New Delhi, Aug. 6: Bangladesh has agreed to the merger of Airtel's local unit with rival telecom player Robi, owned by Axiata of Malaysia.

Sources in the Bangladesh government said Prime Minister Sheikh Hasina had in a meeting agreed to the merger.

The merged entity will own around 30 per cent of the Bangladesh mobile market, making it the second-largest operator in that country.

Sources said the Bangladesh government would be charging about $76 million as fee for the merger, which would create an entity with a combined turnover of nearly $1 billion.

In 2010, Bharti set up Airtel Bangladesh by buying out Warid Bangladesh from Abu Dhabi-based Warid Group for $600 million. It later bought the remaining 30 per cent from Warid through its arm Bharti Airtel Holdings Singapore Pte Ltd, besides investing in infrastructure.

However, concerns over profitability and the need for funds to buy spectrum back home in India forced Bharti to take a relook at some of its smaller units abroad.

In January this year, Bharti Airtel and Malaysia's Axiata signed a definitive agreement to merge their respective subsidiaries in Bangladesh.

Though the value and clauses of the merger have not been disclosed, Axiata will own a 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 Japan's NTTDoCoMo.

The merger was expected to be completed within the first half of this year.

However, because of delays in regulatory approvals, the two sides had signed an extension agreement to postpone the deadline for finalising the deal to September 26, 2016.

Bharti Airtel's net profit in the April-June quarter fell 31 per cent year-on-year to Rs 1,462 crore on account of higher interest costs and forex losses.

The net profit, however, was better than market estimates, helped by an improvement in voice business and cost controls even as revenue growth from data remained sluggish.

Sequentially, too, the net profit was higher than the Rs 1,320 crore reported in January-March 2016.

Earlier in July, Airtel completed the sale of its operations in Sierra Leone to Orange to pay back part of its debt.

"We wish to inform that Orange has completed the acquisition of 100 per cent of the operations of Airtel in Sierra Leone via its subsidiaries, having already closed the transaction for Burkina Faso on June 22, 2016. Proceeds from both the transactions have been applied to pay bank debt," Airtel had said in a statement.