Bharti Airtel (Bharti) and MTN Group have disengaged from their discussions related to the proposed merger deal between the two companies as announced earlier on May 25, 2009. This comes on the back of South African government?s refusal to accept the deal in the current form primarily due to its insistence on the dual listing structure, which is not permitted by current regulations in India.
Cancellation of the deal would remove the overhang related to uncertainty of the proposed deal. Since the announcement of the deal Bhartis stock has under-performed the BSE-30 index (Sensex) by 20%.
I believe that Bharti will now focus on its strategy of expansion in rural areas and successful launch of 3G services in India. Also, the company would continue to look out for overseas expansion, as it is important for it to diversify operations from saturating and highly competitive Indian telecom space and to sustain high growth.