Bharti-MTN deal terminated

India's telecom major Bharti Airtel and South Africa's MTN on Wednesday terminated their talks for a proposed $24-billion equity swap-cum-strategic alliance that could have potentially created the world's third largest mobile phone enterprise.

According to Bharti, the proposed deal was called off after the South African authorities declined to accept certain regulatory constraints on the part of both sides.

The main hurdle to the deal was dual listing of the post-alliance entity, which the South African authorities were pushing for, but was not permitted by the present Indian regulations.

The deal, worth some $24 billion in cash and equity, had called for Bharti to get 49 per cent stake in MTN, while the South African company and its shareholders to get 36 per cent equity in the Indian telecom major.

The South African government was pushing for a dual listing since it would have allowed MTN to retain its national character.

But the Indian authorities said that would be tantamount to convertibility of the rupee.

"We cannot merge two companies and still keep their identities apart," India's Corporate Affairs Minister Salman Khurshid told reporters on Wednesday.

Had the deal gone through, the combined Bharti-MTN entity would have been the third largest mobile phone company in the world, just behind China Mobile and Vodafone Group, with a subscription base of 207 million.