Two-pronged tactic to drive MTN expansion
MTN would consider a merger as well as acquisitions to allow it to pursue expansion, company chief executive Phuthuma Nhleko said on Monday.
"We would evaluate any opportunity to enable MTN to expand," said Nhleko. "The form that it would take could be anything; could be a merger, could be something else."
This year, MTN has failed at two efforts to do deals. Talks with Reliance Communications, India’s second-largest cellular operator, ended without an agreement because of "legal and regulatory issues".
MTN and Bharti Airtel, Reliance’s larger peer, also ended discussions after failing to agree on management and ownership structures.
MTN was "of course affected" by the fallout from the global credit crisis, he said.
"Current market conditions make things tricky and complex," Nhleko said of MTN’s progress in identifying opportunities for corporate action. Potential target companies were cheaper, however.
Nhleko aims for MTN to have 140 million subscribers by 2011. At the end of September the company had 80.74 million customers, including 20.2 million in Nigeria and 16.2 million in South Africa.
MTN offers cellular services in 21 countries.
"Mobile communications in many of the markets in which MTN operates is among the sectors which are very resilient simply because mobile in these countries is the essence of the communications network. There are no fixed-line alternatives."
Although the devaluation of Nigeria’s naira was of "some concern" to the company, Nhleko said MTN was "quite comfortable that the market is still very valuable to us".
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