MTN was hoping to gain full management control of Indian operator Bharti Airtel over time, according to a report this week in an SA financial journal.
According to a cover article in the 9 October edition of the Financial Mail, MTN Group president and CEO Phuthuma Nhleko, pictured, had been aiming to wrest management control of Bharti in collaboration with Singaporean operator SingTel.
The magazine bases this on information it has gleaned from unnamed sources.
“Nhleko and the board had a crafty plan. It wouldn’t be immediate, but MTN was eventually gunning for majority ownership of its Indian counterpart,” the FM says. “In the first phase of the transaction, MTN would have been only the second-largest shareholder in Bharti with a 25% stake. Independent Singaporean investor SingTel already owns about 30%.
“MTN and SingTel could have formed a powerful force with 55% of the largest telecoms player in India — a force that would eventually have taken control of Bharti. It’s hard to see this through the haze of regulatory hurdles and the secrecy, but that was the ultimate prize for Nhleko, say sources.”
The FM says the Bharti deal would have been the “final coup in [Nhleko’s] acquisitive trail through Africa and the Middle East”.
Nhleko has previously said he may not seek to have his contract renewed when it expires in June 2010.
The four-month-long talks between MTN and Bharti fell apart last month with the Indian operator blaming the SA government for placing hurdles in the way of a deal that would have created the world’s third-largest mobile operator by subscriber numbers.
The SA government is believed to have insisted on a dual-listed structure. However, Indian law does not allow for dual listings. — Staff reporter, TechCentral