Geneva: In an exclusive interview, Bharti Airtel Ltd chairman and managing director Sunil Mittal talks about the phone company’s decision to end merger talks with South Africa’s MTN Group Ltd, and the road ahead. Bharti and MTN called off talks on 30 September, the second time that merger talks between the two companies ended in failure. Edited excerpts:
Let me begin by asking you, where did it really go wrong?
I think it is all in the public domain now... I mean, the firms had come to put out a partnership together, which was not to be. We needed certain approvals from the South African government, in particular their treasury, and that did not come through.
Rock solid: Bharti Airtel chairman and managing director Sunil Mittal. Harikrishna Katragadda / Mint
MTN had actually applied, and that is all that we heard officially about the exchange control exemption. Just for the sake of understanding, what really was it, and was it connected with the dual listing or was it something different?We would not know what applications were made. But yes, you are right, an application was made and I believe that a letter from treasury was received by them on 11 September, which is when the DLC (dual-listed company) issue came up. Why they required that approval, I don’t know. But the fact is that cross-holding, in stage 1, did not require a DLC because we were not seeking a merger. But may be the government or treasury in their wisdom wanted to see the eventual path of where the companies will end up being, in terms of the structure. That may have brought out that demand of DLC.
Are you convinced even now that in terms of your strategy of going abroad, seeking an alliance with an emerging market operator, that is the way forward for Bharti?.
Absolutely. If you have to be a global telecom firm, we will get the size from India, and size and scale then allows us to take the business model outside India, where else but the emerging markets. We are here at the ITU (International Telecommunication Union conference in Geneva) talking to several African ministers, prime ministers and each one of them are looking forward to the low-cost business model being injected into the African continent. I think India, therefore, holds great promise for a lasting, solid, sustainable partnership in the telecom field.
I understand the second time around it was MTN that had approached Bharti and its bankers? Is that correct?
Phuthuma (Nhelko), the CEO of the firm, and I have been in touch constantly even after the first round. We are both peers in industry, leaders in our own continents. We were invited onto this deal. In fact this was Phuthuma’s idea that we restart the talks and we like to be invited. We are not a company that makes moves without being invited... Should there be more invitations coming through, we will talk.
Where would these invitations be welcome from?