Rumour Mill: MTN in Telecom Italia sights

Speculation continues to swirl around Telecom Italia (TI) and its possible bids for Indian or South African mobile operators. Despite robust denials from its management, Italian newspapers claim TI is now considering an offer for Johannesburg-based MTN, which is the second largest mobile operator in South Africa claiming over 74 million subscribers in 21 markets.

The US$2 billion offer for Indian-based Unitech would appear now to be taking second place to the possible bid for MTN, which could be financed through the spin-off of TI's network operations and cell phone tower business--and by offering €5 billion of new shares to foreign investors. Rumours suggest that these new backers could be from companies based in the Arabian Gulf.

Market analysts judged TI as an unusual suitor for MTN, but the Italian company's fixed-line expertise could greatly assist the South African firm in rolling out its fibre optic cable network. Other industry watchers thought that a large African investment could serve as an alternative for TI to its Brazilian venture.

Adding further to this pot of rumours is the possibility that Libya will invest up to €4 billion to take a 10 per cent stake in TI. The North African country, which has historical ties with Italy, has a US$100 billion treasure chest bulging with oil revenues that it is looking to invest.

Attempting to scotch these rumours, TI's CEO, Franco Bernabe, stated that all mergers and acquisitions are off and the reports of potential deals were totally unfounded. The company, said Bernabe, was focused on other priorities such as reducing its €37 billion long-term debt and reversing its declining profits.

For more on this story:
- go to Cellular News and IT News Africa

Related articles:
US$50 billion Bharti Airtel/MTN deal bites the dust. MTN story
Vodafone's African ambitions threatened. Vodafone story

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