Bangalore: The collapse of tie-up talks between Bharti Airtel and MTN is expected to be only a temporary setback for Sunil Mittal, who has come a long way from selling bicycle parts to creating India’s top mobile firm.
After the wedding of his only daughter in June, the corporate marriage between billionaire Mittal’s flagship Bharti and South Africa’s MTN to create an emerging markets mobile giant would have capped a memorable year for him.
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Instead, talks to create the world’s third-largest mobile operator collapsed on Wednesday for the second time in just over a year.
“He has lost a battle but the war is far from over,” said London-based Bundeep Singh Rangar, chairman of cross-border M&A advisory IndusView Advisors. “This will not affect his global ambitions, though it has been thwarted for the time being.”
Analysts say Mittal will continue to look for an international footprint with a likely target seen in Kuwait’s Zain and Sweden’s Millicom.
“He clearly wants to scale up and knows he needs to go outside India as well,” said a banker who has worked with Bharti but was not involved in the MTN talks.
“May be he will temper his global ambition for now, but that will strengthen his aim to be at least a regional powerhouse.”
The MTN deal structure was complex from the beginning with a slew of legal, regulatory and political issues, but Mittal was keen to seal the deal and made several rounds of the corridors of power to get the Indian government’s support. Mittal was also aware of the complexities that could sink the talks.
“We are building a pertnership here. We may agree to disagree,” he told the ET Now channel in an interview in August. “We may not get this deal done. If it happens great... If it doesn’t, then we move on to something else.
“It would be a disappointment but no pain.”
Mittal, 51, who started his career selling bicycle parts after he graduated from university in the northern state of Punjab, saw an opportunity in Indian telecoms when the sector was being opened up for private participation in the mid-1990s.
Bharti was a rank outsider in a business that attracted many of India’s mightiest corporate groups including the Tatas, the Birlas and Reliance.
Nobody gave his company, armed with just one licence to operate a mobile network in Delhi and whose only association with telecoms was making push-button telephones, much hope. Mittal kept on buying stakes and icences to expand Bharti’s coverage nationwide, building the leading mobile operator with nearly a quarter of the world’s fastest-growing wireless market.
On his ambitious expansion spree, Mittal roped in some of the best known names to the company. Singapore Telecommunications, Southeast Asia’s biggest phone firm, owns about 30.4% stake in Bharti Airtel.
Bharti Airtel recently started a mobile operation in Sri Lanka and parent Bharti Enterprises has been running mobile services in the Seychelles and the British Channel Islands.
Mittal has built a diversified group with interests including retail and financial services, and has already partnered global names such as Wal-Mart, Axa and Del Monte Pacific across his businesses. Mittal is the second of three sons of a politician. His brothers are involved in the business. A yoga and golf enthusiast, he has been conferred with India’s prestigious civilian award “Padma Bhushan”.