MTN has denied rumours of a fourth attempt to enter the Indian market.
This came after Business Standard reported that MTN is in talks with India's Loop Telecom, which has mobile telephony licences in various regions where it runs 21 operations, and is looking to sell up to a 45% share to a strategic investor.
The report further states that MTN has been negotiating with Loop through merchant bankers for a deal that could see MTN's entry into a market that is adding 14 to 15 million mobile phone users every month.
MTN has rejected all talk of discussions with Loop. “The MTN Group can confirm that it is not in talks with Loop Telecom and firmly denies any media speculation suggesting such talks,” says MTN Group spokesperson Nozipho January-Bardill.
Untapped market
According to communications minister Siphiwe Nyanda, India is an important developing nation, and government would like to increase relationships with the country. Finance minister Pravin Gordhan said his Indian counterparts have been invited to help create a framework that will facilitate large mergers.
“The deal would have given MTN entry into one of the biggest developing markets in the world in cellular. Penetration rates in India are low compared to here so it's an untapped market. MTN can clean up there,” says MD of BMI-Techknowledge Dennis Smit.
He adds that the African market is becoming mature and so MTN has to now look east or at South America.
Failed attempts
Discussions with Loop Telecom would have been MTN's fourth attempt to enter the Indian market, after impending deals with telecoms giants Bharti Airtel and Reliance Communications did not materialise.
MTN twice came close to a tie-up with Bharti Airtel, most recently in September last year.
The negotiations between MTN and Bharti could have resulted in the world's third-largest mobile operator being formed, with more than 200 million subscribers.
Talks between the companies first failed because Bharti felt MTN wanted to make the Indian company a subsidiary.
Of the second attempt, MTN said the operators had not been able to conclude a transaction within the economic, legal and regulatory framework within which both companies operate.
Nyanda says government will encourage renewed talks if MTN and Bharti decide to come back to the negotiating table.
In 2008, MTN had announced an offer from Reliance Communications to begin share swap talks. This deal fell through by the middle of that year, after an ongoing blood feud between Reliance shareholders, brothers Anil and Mukesh Ambani, permanently put discussions on the shelf.
Most recently, MTN walked away from a deal which gave it the possibility of taking over Egyptian-based operator Orascom's African business, without giving a clear reason.
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