The high-profile M&A talks between operators Bharti Airtel and MTN Group for a $23 billion merger deal have been dismissed yet again. Airtel informed the BSE that talks would be broken off when the exclusivity period ended yesterday and gave the reason as the failure to obtain a necessary approval by the South African government. This is the second time that a merger between the two giants has been called off - last year, Reliance Communications also held discussions on a potential merger with MTN. Airtel has left the door open for future talks. Our Take That the deal did not go through was quite a surprise, since we expected talks to be extended further. We didn't think the deal was worth going through with, since a merger between Bharti and MTN would have created an elephant of sorts. Though they may be seen as equals, keep in mind that MTN operates in 21 countries, and has 21 governments and regulators to deal with: a merger between the two large companies would have been not just a case of complex structuring, but also complicated management: in turn, it could have ended up slowing down decision making in an increasingly competitive Indian market. In India, Airtel needs to focus on the high end subscriber market: the high ARPU, post-paid subscribers account for a significantly large chuck of telecom operator revenues, and given Airtel's track record with customer service, we think they're likely to benefit most from mobile number portability - maybe…
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