India's Reliance Communications is in tie-up talks with MTN after rival mobile operator Bharti Airtel hung up on discussions with the South African phone giant in a dispute over control, an AFP report said
MTN Group, Africa's biggest cellular operator, and Reliance Communications, India's second largest mobile firm by subscribers, were discussing a 'potential combination of their businesses' to 'achieve a unique and global platform for exponential growth,' the Indian company said in a statement.
Reliance Communications, headed by billionaire Anil Ambani, said the two firms agreed to hold 'exclusive talks' for 45 days.
A partnership could create an emerging market powerhouse with a 116 million subscriber base, eclipsing most Western mobile phone businesses, the AFP report further said.
Any deal would have to satisfy political sensitivities in South Africa about the future of MTN, one of the country's most prestigious corporate flagships, as well as stay on the right side of Indian foreign investment rules that require domestic telecoms firms to be 74% locally-owned.
The announcement came two days after MTN's talks with Bharti, India's biggest mobile operator, which is 30.5% owned by SingTelNet, collapsed over an ownership structure proposed by the South African firm.
The proposal would have involved 'Bharti Airtel becoming a subsidiary of MTN' that would have 'severely compromised' its dream of being a 'true Indian multinational telecom giant, symbolising the pride of India,' Bharti said.
A Reliance Communications spokesman said the company, which reported net profit of $1.35 billion last year, had nothing to add to its statement, the AFP report further said.
But an industry source close to the discussions said the 'line of talks is completely different from those with Bharti. These are not merger or acquisition talks.'