Should the MTN and Bharti merger take place?

There are distinct advantages for either organizations in case this merger comes through.

1. Bharti has managed to develop a Supply Chain model like no-one else in Telecom, ever before. The model is extremely value efficient where Bharti doesn't invests in Capital but thrives its growth on basis of strategic relationships with expert technology partners. The revenue model is based on the revenue Bharti generates from its subscribers. I think no one else has been able to even replicate this successfully. The parternship gives MTN straight access to a low cost supply chain model.

2. At the same time, Bharti has exposure in specific markets; primarily Indian market, which is low cost but till now focussed only in city clusters. Indian Telecom market has changed a lot in recent times, new operators, Almost 100% Urban Telecom Density, MNP and other factors make it mandatory for Bharti to evolve as a Global Player operating in multiple countries. This will help Bharti sustain in Telecom for a longer time and compete effectively with competitors like Vodafone and Etisalat.

3. Higher ARPU in Africa is surely an advantage for Bharti to provide thrust for combined entity. While continuing exponential growth in India with lowering ARPU provides a sustainable growth.

The scale of economies for either organizations, advantages of International presence- Geo-political, technological, Regulatory; are obvious advantages.

From the subscriber perspective, it remains to be seen how will it impact. If the markets are dealt as independent markets, then probably there will be no impact. If at all Telecom develops into a market which can operate on a Transnational basis like FMCG companies, then the subscribers will enjoy newer advantages. Guess, subscribers have nothing to loose from this.

Way to go after the combined entity becomes No. 3 Telecom Company in the world, by subscriber base. The other 2 still being chinese players not operating anywhere outside China.

Cheers