Business Communication

Presented By
Dhaval Ambani
Bharti Airtel Details
 Airtel comes to you from Bharti Airtel Limited.

 Bharti India’s largest telecom services provider with a revenue of about Rs 37,000 crore
(Rs 370 billion), market capitalisation of over Rs 1.60 lakh crore (Rs 1.60 trillion),

 3 Strategic Business Units (SBU’s)

 Mobile Services, Airtel Telemedia Services & Enterprise Services.

 The mobile business provides mobile & fixed wireless services using GSM technology
across 23 telecom circles.

 Airtel Telemedia Services business offers broadband & telephone services in 95 cities.
Recently launched India's best Direct-to-Home (DTH) service, Airtel digital TV.

 The Enterprise services provide end-to-end telecom solutions to corporate customers.

MTN Details
Company Profile

 Launched in 1994 The MTN Group Limited (MTN Group)

 MTN is a global player operating in about two dozen countries.

 Offering cellular network access and business solutions.

 Listed in South Africa on the Johannesburg Securities

Exchange (JSE) Telecommunications sector.  

 Multinational telecommunications provider, with its core

operations in 21 countries in Africa and the Middle East,
90,7 million recorded subscribers (December 2008)
 CALL LOG
2008
May 6: Bharti Airtel begin talks with MTN to buy stake in the South African company

May 25: Bharti and MTN call off talks

May 27: Reliance Communications (RCom) and MTN sign a 45-day exclusivity
agreement to negotiate a deal

Jul 19: RCom and MTN call off talks

2009
May 25: Bharti-MTN announce talks for a $23-billion share-swap-and-cash deal.
Deadline set for July 31
Aug 3: Bharti-MTN extend deadline from July 31 to August 31
Aug 20: Bharti-MTN extend deadline again to September 30
Sep 14: South African government says
MTN’s ‘South African character’ must be maintained
Sep 15: Indian government says open to dual listing in India
Sep 24: Officials from the South African government meet Sebi, RBI and finance
ministry mandarins
The Deal
Bharti on offered 86 rand ($11.4 billion) in cash and 36
per cent stake in Bharti for each MTN share for a 49
percent stake.
Deal benefits to Bharti
 Increase in annual sales of $20 billion and 200 million
wireless subscribers from Johannesburg to Mumbai.

 Would become 49% stake holder of South Africa biggest

wireless service provider

 The combined operation would have helped Mittal’s

Bharti increase overseas sales at a time when Reliance and
Vodafone are narrowing its lead in India.

 Competition is also intensifying with the entry of more

foreign rivals including Japan’s NTT DoCoMo Inc.
 Challenged by Indian Investors Protection
Council (IIPC)
Mittal Brothers alone will acquire 49 per cent of equity
shares with voting rights in one shot,.

MTN and its shareholders will be issued 36 per cent of

GDRs with voting rights only upon conversion into equity
shares — 25 per cent in Bharti Airtel and 11 per cent
shares from Bharti Telecom.

This makes merger only between promoters and not

between the two listed company i.e. Bharti Airtel and
MTN
 The Hurdles
South African considers MTN as a crown jewel

South Africa government holds 21 % stake through

Public Investment Corporation

Wanted to maintain MTN’s “South African character”

and was looking for a different structure for the deal.
 No Dual Listing
Dual listing structure would have rendered India’s foreign
direct investment policy, led to huge tax losses to the
government.

Weakened market regulator SEBI unable to monitor

overseas stock exchanges – MTN listed Johannesburg
Securities Exchange
Conclusion

The deal fell because of South Africa's political

compulsions & SEBI regulations