[FT-Lex] Talk about threading the needle. The structure of the proposed partnership between Bharti Airtel and MTN announced this week demonstrates the lengths the mobile operators are willing to go to avoid regulatory obstacles that have dogged so many other emerging market mobile deals.
Just over a year ago, Bharti walked away from a deal that would have seen it take a 51 per cent stake in its South African counterpart. Lurking behind the collapse were South African regulators’ and unions’ concerns about foreign control of “national champions”. More recently, the country’s telecoms regulator was goaded into opposing Vodafone’s attempt to secure a controlling stake in Vodacom, a rival South African operator, by union groups that objected to potential job losses.
Be that as it may, realising the full benefits of a tie-up between the two companies may only be possible in the context of a full merger, which both Bharti and MTN say they want. For Bharti and MTN to get the all-clear on the limited deal currently under discussion is one thing. But if they really want to create the world’s third biggest emerging mobile operator, sterner regulatory tests await.