Twice bitten MTN turns shy on deals

Written by Agencies | Johannesburg, August 28: | Updated: Aug 28 2008, 22:42pm hrs
Having failed in attempts for a merger with India's RCOM as well as Bharti Airtel, South African telecom major MTN on Thursday said it is not urgently looking at a deal, even as its growing subscriber base in existing markets pushed its first-half revenue by 35 per cent.

MTN on Thursday said its consolidated revenue rose by 35 per cent to 46.1 billion rands in the six-month period ended June 30, up from 34.2 billion rand in the year-ago period.

The revenue surge was primarily driven by the company's 54 per cent subscriber growth since June 30, 2007, to 74.1 million, especially in Nigeria and South Africa.

MTN's Group EBITDA increased by 29 per cent to 19.6 billion rand in the first half of this year, while its total assets moved up by 26 per cent to 146 billion rand from 116 billion rand on December 31, 2007.

Announcing the results, company's CEO Phuthuma Nhelko said MTN's vision was "to be the leader in telecommunications in emerging markets" for which it would focus on consolidation, leveraging existing footprint and convergence.

MTN would "continue seeking value enhancing opportunities in existing and new territories," Nhelko said, but added that he was not looking at a M&A deal "urgently."

Earlier in May, MTN held negotiations with Sunil Mittal- led Indian telecom major Bharti Airtel for a possible amalgamation deal, but talks fell apart after the Indian entity rejected being a subsidiary of the South African firm.

After Bharti, MTN held exclusive talks with Anil Ambani- led Reliance Communications, another Indian telecom major, but a deal could not fructify after weeks of negotiations.

The talks ran into uncertainties after some legal issues were raised by Reliance Industries, India's top corporate headed by Anil's estranged elder brother Mukesh Ambani.

On whether MTN is looking at new opportunities after failure of talks with Bharti and RCOM, Nhelko said, "there is nothing pushing us to do a deal urgently."

"Given current developments in global telephony market, the groups prospects for the second half of 2008 remain positive in increasingly competitive markets," MTN said.

The company listed out, however, "actively seeking value-accretive expansion opportunities in emerging markets" as one of its major strategic priorities going forward.

Nhelko also said the company was looking at acquiring an Internet service provider in Syria, but did not disclose the name.