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Reliance is not an ideal match for MTN
Updated:2008/7/10 15:45
Tags:MTN
This is no simple calculation based on the current size of the two businesses. It’s all about expansion and market dominance, so each must be valued on its potential growth. MTN has networks in Nigeria and Iran that have barely begun to meet the pent-up demand for cellular services. It is already the largest operator in Africa and the Middle East with 68-million users, and runs networks in numerous African countries all housing untapped populations. Reliance is India’s second- largest operator, serving 50 million users in a market where cellular penetration is already higher, and where Bharti Airtel is the dominant operator. On the plus side, India is the world’s fastest growing mobile market and is the largest after China. “When you look at their relative profiles and where the big growth is coming from, I imagine the growth path for MTN is more attractive,” says Bruce Main of Ivy Asset Management. MTN could also tackle other emerging markets such as Brazil, and doesn’t need an Indian partner to do that. Many investors would like MTN to continue its growth trajectory alone, without the hassles a merger with Reliance would cause. Better still, MTN could find another player to absorb, in the neat way it bought Investcom in the Middle East. That did not get marred by arguments over who buys whom and who wields the power. MTN has a “fantastic” growth path, Main says. If it abandons Reliance its shares may take a knock to R100 or so. Which would be an opportunity to pick up more shares “using the vagaries of the market to your advantage,” Main says.
Source:mybroadband ,China Mobile denies any deal with India's Reliance Communications (2009-6-23) ,MTNL Launches Low-Cost Pre-Paid 3G (2009-6-8) ,SingTel ready to rebuild stake in Bharti after MTN merger (2009-6-3) ,Bharti-MTN deal to help SingTel expand to Africa (2009-6-1) ,Bharti, MTN in $23 Billion Talks (2009-5-27) ,Bharti May Buy MTN Stake in $23 Billion Merger (2009-5-26) ,India¨s Bharti in talks to buy stake in MTN (2009-5-26) ,Bhartil-MTN deal is largest Indian deal this year: Thomson Reuters (2009-5-25) ,MTNL launches Mumbai 3G network, reveals network deal with Alcatel-Lucent (2009-5-18) ,MTN Zambia plans USD95 million investment in 2009 (2009-4-13) ,China Mobile May Acquire MTN's Assets (2009-4-3) |
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