A happy end to a long saga

The Bharti - MTN story has finally had a happy ending. First, a disclaimer - Bharti Airtel has been (and remains) one of my favourite stocks, so anything I say here is obviously biased :-)

While in my humble opinion, the deal would have been good for Bharti had it gone through (it would have given Bharti the chance to replicate its low-cost model elsewhere i.e. MTN has much lower margins than Bharti even though it gets much higher ARPU or revenue per user), it is better that Bharti decided to put its foot down when the MTN board reneged on agreed terms and wanted a reverse merger. I think this is a story that MTN has played out multiple times in the last few years - it has dallied with every large mobile operator you can think of - but has always gone back on its word when the rubber hit the road. It would be tough for anyone to take MTN seriously from now on.

Except our dear friend, Mr. 'Power' Ambani, who will gladly jump in and do anything to see valuations rise as he huffs and puffs to demonstrate his victory in sibling rivalry. Anything except improve his companies' operating performance, that is. Even then, tough to see how he would agree to make RComm a subsidiary of MTN.

I think this also demonstrates the high quality of management at Bharti, who were able to walk away from a deal which they could have done, because it went against their desire to make Bharti a truly global company, instead of merely making themselves richer. I think they have done the right thing! All the best to them...