Johannesburg-based MTN Group is seeking partnership with Indian Reliance Communications as part of the re-evaluation of its South African assets.
The suspected re-attempt for collaboration with Reliance Communications follows a failed effort to tei up with Bharti Airtel in 2008, though agreements have not yet been confirmed, Bloomberg reported.
Negotiations with Airtel in New Delhi in 2009 failed to succeed after political opposition in South Africa lead to a dead end.
Khulekani Dlamini, head of research at Afena Capital, said he “wouldn’t be overjoyed” if an Indian link-up attempt proves to be successful this year.
Dlamini spoke concerning his concerns about the unsure market after an MTN shareholders meeting held on Monday.
“You’re talking about a market where pricing cannot really get any better and could possibly deteriorate further. It also has an adverse impact for my dividend. If they go and have to spend a lot more money there, it’s worrisome.”
Reliance Communications’ shares have fallen 74 per cent and Bharti Airtel shares 28 per cent since the previous efforts to collaborate.
The two Indian companies have a combined market value of US$35 billion.
Interest in Indian acquisitions, however, will bring MTN closer to the Asian market.
Bruce Main, fund manager at Asset Management Ltd., said: “The competitive environment in India, which is so aggressive that the main mobile operators started slashing margins substantially.”
HumanIPO reported yesterday Zunaid Bulbulia had been appointed chief executive officer (CEO) for operations in South Africa, replacing Karel Pienaar.
MTN is currently the biggest network operator in Nigeria, despite its home base being South Africa.
