RCom – MTN Deal Unlikely
By Webmaster - Last updated: Wednesday, June 2, 2010 - One Comment
Media Reports suggest that MTN could reopen negotiations with RCOM. Per reports, the proposal is similar to the one in 2008 when
RCOM had proposed to merge with MTN by swapping Anil Ambani’s 67% equity holding in the Indian company with MTN shares.
We believe the possibility of such a transaction is limited this time mainly because,
- MTN seems more focussed on consolidating its market leadership in Africa apparent from its ongoing talks with Orasacom
- MTN has no meaningful presence in Asia and entering Indian may not be verystrategic.
- Indian telecom space is overcrowded with 14 players currently, and may not appeal to MTN as a very good opportunity.
- Mobile ARPUs in India have declined by 23% in the last 12 months and TRAI – regulatory regime does not encourage consolidation
However, MTN has historically grown by M&A. With USD3.2bn in cash and liquid investments and a strong balance sheet we cannot completely rule out the Merger which will take a long way to materialize.
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Time June 2, 2010 at 6:24 pm
[...] truce there are all kinds of rumors being floated by folks close to the management. At first it was RCom merging with MTN in Africa, which looks a bit difficult. The new rumor that surfaced today with Heavy Buying in RCom stock is [...]