Bharti restarts MTN merger talks

Bharti wants to expand beyond the Indian mobile phone market

India's largest mobile phone company, Bharti Airtel, has resumed merger talks with South Africa's MTN, a year after a previous plan to join up was abandoned.

The two firms are in talks for Bharti to take a 49% stake in MTN, while the South African company would get a 36% stake in the Indian business.

Together they would become the world's third biggest mobile phone firm, with more than 200 million customers.

Talks failed last year due to a dispute over who would lead the merged group.

'Tangible benefits'

The two firms, which have combined annual revenues of more than $20bn (£13bn), said talks were at an early stage.

The terms of the merger would include an exchange of both cash and shares.

Analysts broadly welcomed the announcement, but cautioned that it remained to be seen whether the deal goes ahead.

"There are some tangible benefits for both: bigger market exposure, access to innovative products and better buying power," said Khulekani Dlamini, a fund manager at Cape Town's Afena Capital.

Bharti signed a sponsorship deal with England's Manchester United Football Club earlier this month.

India and sub-Saharan Africa are two of the world's fastest growing mobile phone markets.

After last year's merger talks between Bharti and MTN ended last summer, rival Indian mobile phone group Relliance started its own merger talks with MTN, but they also ultimately came to nothing.