Bharti MTN Deal Aftershocks
After the failure of $23 Billion mega merger with MTN bharti would now be concentrating more on domestic market, However they will also rival MTN now for african assets.
Bharti Airtel said recently that it may battle its former partner for control of Kuwait’s Zain Telecom, which could include an offer from group Essar. Preliminary talks between the parties have already begun.
Last month MTN announced it would consider buying the African assets of Zain if a deal with Bharti collapsed. Essar Group, a telecom with growing assets in Africa, has also been sounded out as a potential bidder by Zain shareholders. The opportunity is of interest to Bharti as the African market has been growing at a rate of 25 percent, roughly the same speed as India.
I am not sure if MTN would have lose its “National Character” which was reason South Africa did not clear the deal but it will surely lose Financial Character now in the process.
Despite the failure of deal Bharti and Sunil Mittal still has alot on his plate, He would now be concentrating on 3G market in India which is good news for consumers. We can always do with few more 3G players as early as possible. The Indian government has announced it will auction four India-wide 3G slots of radio bandwidth in December and has imposed a floor price of 35 billion rupees which is approx 700 Million USD. 3G will be the next big thing for indian Telecom players like Bharti to increase their revenue share and it will also help Airtel to move ahead in fierce domestic competition. BDA survey projected 3G will constitute 46% of the revenue by 2013 and it will be an game changer in Indian market.
Bharti’s retail arm plans to raise staff levels to more than 60,000 by 2015 from 2000 currently as it aims to become a company with turnover of one billion dollars.
Bharti has also got a 50:50 joint venture with Wal-Mart to bring the US retail giant to India to create a modern wholesale distribution system. In May, the partnership opened its first “big box” outlet in Amritsar. Bharti has a tie-up as well with AXA Life Insurance which has just announced it is aiming for a five percent market share by end-2012 in India’s fast-growing life insurance business.
However bharti will still have to keep growing abroad and according to reports they have not given up, they are planning to bid for Luxembourg based Millicom International Cellular (MICC). Millicom provide cellular service in 16 countries in Asia and Africa.
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