Bharti and MTN extend talks until end of September

Bharti Airtel and MTN Group have extended the exclusivity period for merger talks for another month, keeping negotiations open until the end of September.

India’s biggest mobile operator said in a statement released today that "discussions between the parties regarding the potential transaction continue to progress satisfactorily” and added that both operators had agreed to extend the exclusive period until September 30, 2009.

However Bharti Airtel also sought to downplay any rumours that the extension indicated any particular breakthrough in negotiations had been made. "No decisions or agreement to acquire any shares or implement the transaction has yet been made by the boards of either Bharti or MTN and the discussions may or may not lead to any transaction," the statement added.

South Africa’s MTN Group and Bharti Airtel announced that they had restarted merger talks, which are thought to be worth about $23 billion, in May 2009. A merger between the two companies would create the world’s third largest wireless operator behind China Mobile and Vodafone.

According to figures from Informa Telecoms and Media’s World Cellular Investors report, a merged MTN-Bharti Airtel entity would have had more than 167.5 million subscribers in March 2009.

Nicholas Jotischky, principal analyst at Informa Telecoms & Media, said MTN’s African operations would “benefit greatly” from Bharti’s experience of operating in high growth, low-income environments, if the merger goes ahead.

“In India, the operator [Bharti] manages to keep reasonable margins despite a monthly ARPU of around US$5-US$6. Reducing operating costs has been a crucial maxim for all Indian operators, who operate on the back of very low ARPUs, and models such as infrastructure-sharing and the outsourcing of network management have proved to be successful,” he said.

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