It is reliably learnt from various analysts that India’s leading mobile service provider, Bharti Airtel is likely to bid for MTN South Africa. Bharti’s management recently stated that Bharti’s business model could be replicated in other emerging markets and it may opt to go for oversees acquisitions.
Bharti Airtel’s model of business is particularly suited to low income, high density population countries and may also fit some of the markets in which MTN operates e.g. Nigeria. MTN reported 68.2m subscribers across the 21 countries in which it operates. The three key markets by subscriber numbers include Nigeria with 17.8m subscribers, South Africa with 15.2m and Iran with 9m subscribers.
However, the enterprise value of MTN is approximately the same as that of Bharti Airtel at $41 bn and if it involves a cash component, it may not be a feasible idea considering the 3G auction in which Bharti Airtel has to bid desperately in India. However, keep your fingers crossed as SingTel, Govt of Singapore, etc may come in handy as trump cards 🙂