Where will MTN look next?
MTN called off talks with Reliance Communications late last Friday, once again prompting speculation about the mobile operator’s future plans.
The details of the Reliance deal have been sketchy at best, with media and market conjecture accounting for most of the discussion surrounding the nature of a possible agreement.
Why the deal fell through is likely to be the topic of even more speculation. However, it seems certain that MTN will continue to consider other possible suitors and earmark possible targets. The question is though, who will MTN turn to next?
“We believe that MTN should continue its pursuit of emerging markets,” says Frost & Sullivan ICT industry analyst Lindsey Mc Donald.
“The company has proven that it is truly an expert in this type of market, and its aggressive expansion into Africa and the Middle East are evidence of this.”
The $2 billion worth of funding from Standard Chartered to develop its operations in the Nigerian market was a real vote of confidence in the operator’s ability to be successful in tough markets, and this is a telling sign of the company’s strengths.
The negotiations with first Bharti and subsequently Reliance during the past six months further demonstrate the confidence and enthusiasm with which the market views MTN.
“Frost & Sullivan expects that Latin America could be the next big area of interest for MTN,” Mc Donald says.
“Its market characteristics are similar to those of Africa, the mobile market has demonstrated robust growth and there are operators present there that could be good targets or partners going forward. America Movil is one possibility.”
Whichever direction MTN decides to take, the company has shown that it is very protective of its brand and corporate culture. Mc Donald believes that retaining these will continue to be non-negotiable in any negotiations.
“Whatever the shape of the company moving forward, there is little doubt that the retention of the MTN brand and culture would be two of the most important aspects executive management and shareholders should ensure,” she says.
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