South African mobile operator MTN wants to conclude a proposed tie-up with Bharti Airtel quickly to end any doubt about the deal, but doesn’t rule out interest in part of Kuwaiti firm Zain.
“We want to do the deal sooner rather than later because we are really uncomfortable with the uncertainty,” MTN Chief Executive Phuthuma Nhleko told Reuters on Thursday.
“We can then take a view whether we proceed or not.”
Last week, Bharti and MTN extended, for a second time, talks aimed at creating the world’s third-biggest mobile company, frustrating investors who wanted the deal finalised and raising concerns its structure was too complex to succeed.
Both firms agreed to extend talks to Sept. 30, after previously extending discussions by a month to Aug. 31, as they negotiate a $23 billion cash and share-swap deal aimed at an eventual full merger.
But Nhleko didn’t rule out a possibility of buying all or parts of Kuwaiti firm Zain’s African operations, if the deal with Bharti is called off.
“If the Bharti deal doesn’t come to fruition, we will look at other opportunities. If there are no overlaps (with Zain Africa) and the opportunity presents itself, there is no reason why we won’t explore it. But that is very hypothetical,” Nhleko said during the company’s results presentation.
He later told Reuters that he doesn’t know whether or not Zain was selling its Africa operations. “I’ve seen reports, but sometimes reports and reality are not exactly the same. Our focus now is the Bharti deal, and we think we have a lot in our plate.”
MTN’S former suitor Reliance Communications is believed to have started talks to buy Zain’s African operations, underscoring a drive by Indian telecom companies to gain a foothold in Africa, two banking sources told Reuters last week.
On Thursday, MTN posted first-half results showing headline earnings per share (EPS) rose 22.5 percent to 415.5 cents, in line with its forecast for a rise of 19.8-24.8 percent.
Its shares were 1.3 percent higher at 129 rand by 1338 GMT, outperforming a flat JSE blue chip Top-40 index.
Nhleko said that under the proposed deal with Bharti, MTN would continue to be listed on the Johannesburg bourse, adding there were misconceptions about the proposed transaction.
“MTN remains the way it is. All that happens is that Bharti takes a stake in MTN and vice versa. The character and the identity remains the way it is and the company continues to expand from South Africa,” he said.
He said effectively the proposed deal was a 3-way deal involving MTN, Bharti and Asia-Pacific telecom firm Singapore Telecommunications, which owns a stake in Bharti.
The South African group is trying to diversify beyond its key markets of Nigeria and South Africa and has been banking on a new venture in Iran, which some investors deem risky given the country’s nuclear stand-off with the West.
But the company is required to reduce its stake by 10.3 percent in Irancell to 38.7 percent by November by selling the interest to Iranian public, according to its licence conditions.
“We will abide by the licence and will do what Iran government says. We will engage the regulator for whatever the licence requires,” said Nhleko.
He added MTN was keen to enter the Angolan market if a licence became available.