MTN targets Reliance Communications to enter Indian telecom market

Telecom Lead Asia: Is MTN looking at Reliance Communications to enter Indian telecom market.

A Bloomberg report suggests that MTN is exploring a potential acquisition in India, five years after it first tried to strike a deal with an Indian company. Reliance Communications is one of the potential targets.

MTN Group is Africa’s largest wireless carrier.

There’s synergy between Reliance Communications and MTN. Both are looking at data revenue for future growth. Both are not relying on 4G / LTE business for significant growth. 3G is a focus area for both MTNL and Reliance Communications. Both telecom operators are trying to lead in emerging telecom markets and rely on cost effective business plans.

Reliance Communications, the phone company of billionaire Anil Ambani tried unsuccessfully to merge with MTN in 2008.

Besides Reliance Communications, MTN was twice in talks to be bought by another Indian carrier, Bharti Airtel, until negotiations broke down in 2009 amid political opposition in South Africa.

A successful deal would give MTN its first major foothold in Asia, bringing it closer to matching the international reach of competitors Vodafone Group and Airtel.

MTN is keen to expand beyond Africa and the Middle East amid increased competition and slowing growth in the region’s phone market.

MTN is already present in the Afghanistan telecom market. MTN is one of 12 operators shortlisted for the sale of two telecommunications licenses in Myanmar and is looking for other targets in southeast Asia.

With 195 million subscribers across more than 20 countries, MTN is the biggest carrier in Nigeria, although at home in South Africa, its market share trails Vodacom Group.

In the first quarter, MTN’s monthly revenue per user in South Africa dropped 10 percent to 110.62 rand ($11.40) from a year earlier.

In Q1 2013, MTN group recorded 195.4 million subscribers, up 3.2 percent quarter on quarter. Data revenue rose 42.2 percent year on year. Mobile data users grew 8.2 percent.

Announcing the Q1 result, MTN Group President and CEO Sifiso Dabengwa said: “Our performance is underpinned by a focus on improvement in network quality and coverage, wider and more effective distribution and by the introduction of various innovative and competitive products and services to our customers.

“Our capital expenditure program is progressing well. This is designed to ensure the Group’s continued competitiveness and support subscriber and revenue growth into the future. The solid performance over the past quarter means we have maintained our guidance for net additions for the full 2013 year at 21 million,” Dabengwa added.

[email protected]