Dialog Axiata has signed an agreement to snap up Bharti Airtel's business unit in Sri Lanka.

The agreement has received approval from the Regulatory Commission of Sri Lanka and will see Axiata acquire a 100 percent stake in Airtel Lanka by issuing Airtel a 10.4 percent stake in Dialog Axiata.

An agreement between the two was first announced last May and will see the market consolidate from four telcos down to three.

Financial terms of the deal have not been disclosed.

Dialog Axiata is estimated to have close to 18 million total mobile connections in Sri Lanka, while Airtel Lanka has just over 3.1 million.

Dialog Axiata was initially founded in 1993 as MTN Networks, with 90 percent of equity through Telekom Malaysia Berhad (TM) and the rest from Capital Maharaja. The operator changed its name to Dialog in 2005.

As for Airtel Lanka, the operator only launched in the country in 2009. Its Indian-based parent company Bharti Airtel operates in several Asian and African markets including Bangladesh, Kenya, and Rwanda.