What's the fuss?

It is interesting that the Congress of South African Trade Unions (Cosatu) has been rather quiet about the pending merger between MTN and India's Bharti Airtel, especially when it made all that fuss about Vodacom's listing.

Most concerns about the pending merger are around a lack of information. No one seems to know - apart from the powers that be - what the final company will look like.

Some analysts think the two companies will be separate, and pretty much equal. Others are concerned that Bharti will have the upper hand and change the way MTN looks and, more importantly, operates.

Hopefully, the market will find out at month-end what exactly is going on, when the exclusivity arrangement expires. So far, much of what has been made public after the initial announcement has been based on unnamed sources.

The latest news is that MTN and Bharti are in talks with banks to set up financing arrangements, which we can take to mean that talks have not been called off. But, chatting to bankers does not mean the whole thing will go ahead, just that the two companies are getting their ducks in a row.

However, the trade union federation has not expressed any of these concerns. Instead, it has said it will not block the merger, despite how much of MTN Bharti will own.

Frankly, if Cosatu was worried about Vodacom, why has it said nothing about MTN? I don't really see a difference between the two. Sure, Vodacom may be seen as some sort of national asset, because it was half-owned by Telkom, but should that be a reason for kicking up such a fuss?

Cosatu's High Court shenanigans almost derailed the listing, and caused the Independent Communications Authority of SA (ICASA) to rethink its earlier decision that granted approval for the deal.

The federation's meddling and ICASA's subsequent about-turn caused havoc in the market, with the rand losing 3% to the dollar as a result of concerns that Vodacom might not list, after all.

Cosatu's concerns seemed to be hinged around the fact that Telkom needed Vodacom's cash injection as a profitable operator in order to subsidise rollout to rural areas.

Cosatu secretary-general Zwelinzima Vavi is quoted as having said: “As you know, most of Telkom's profits came from the 50:50 ownership.” Frankly, I think the federation was just concerned that, with SA's largest cellular operator, Telkom would run into financial difficulty and shed jobs.

Cosatu also seemed to be fussed about the fact that Vodacom would now have a majority shareholder that is not SA-based. How would it then classify the fact that Bharti will own 49% of MTN? Sure, that's not a majority stake, but it is enough to gather that MTN will no longer be autonomous.

Maybe that is the federation's guiding point, maybe it only gets upset when 50% and one share is sold to an external company. Maybe we should tell it that foreign investors put money in South African companies all the time, every day in fact.

That's what the JSE is for - investment.

Foreign investment is one way to keep this wolf at bay, and pay out what the country owes. And offshore funding into SA should also result in job creation.

Nicola Mawson, group financial editor

And I happen to think that foreign money coming into SA is good. Great, in fact. We owe goodness-only-knows how much in imports that have not been balanced out by exports in the form of the trade deficit.

Foreign investment is one way to keep this wolf at bay, and pay out what the country owes. And offshore funding into SA should also result in job creation.

Yes, there is the argument that neither Bharti nor Vodafone are starting up a new company that will immediately employ thousands of people, and that they can just as easily sell up and move out. But, the fact that South African companies look so attractive that billions will be spent investing in them is a good sign. It means that other external companies will want to put money into SA.

And that will ultimately create jobs. Is it not the federation's mandate to protect jobs? Cosatu doth protest too much.

I think the bigger picture is the more important one here.