Subcontinent meets continent

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the two very different corporate cultures—the impact, if any, on Singapore Telecommunications, which has a 30.5% stake in Bharti Airtel, and the attitude of these companies towards their networks, as conveyed. MTN attempts to keep its network up-to-date technology-wise, whilst it seems that Bharti Airtel’s is often characterised by congestion and other network issues.

MTN is one of the top four companies in Africa by market capitalization, and one of the top eight in turnover terms, and its share price is running at all-time high levels. It’s a moot argument as to who should be investing in who when it comes to Bharti Airtel and MTN. Nevertheless, any investment in MTN would have to be at a hefty premium, and that poses an interesting issue of whether the necessary funding can be obtained. Even if the relevant funding was obtained, one would ask whether the deal would be approved by the various regulatory authorities. In addition, would the time taken to bring any deal to fruition allow competitors to gain ground on either of the two players involved and thus stifle their potential growth?

What is patently clear is that a tie-up between the two companies would create a true global player in the international cellular market. Unlike the other global players, this “new” entity would operate in precisely those areas of the world that have the highest growth potential. Thus, this is a very interesting development to watch on an ongoing basis.