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China Mobile hangs up on MTN

(Agencies/China Daily)
Updated: 2008-05-09 10:30

China Mobile, the world's biggest wireless carrier, has said it is interested in the South Africa market but has not bid for MTN, the subject of takeover interest by India's Bharti Airtel.

"China Mobile has not joined the MTN bidding, but we are interested in the South African market and are looking at various opportunities for entering that market," Chief Executive Wang Jianzhou said yesterday after the firm's annual general meeting. He declined to elaborate on the firm's plans.

Bharti and MTN Group said on Monday that they were in talks that may or may not lead to a deal.

China Mobile, UK-based Vodafone and India's Reliance Communications were cited by the Financial Times this week as also likely to be interested in MTN, which operates in Africa and the Middle East and has a market value of $40 billion.

Marvin Lo, an analyst with Daiwa Institute of Research in Hong Kong, said if China Mobile were to bid for MTN, it would likely do so at the parent company level - an approach often taken by State-controlled companies when making acquisitions. Those assets are then eventually injected into the listed units of State enterprises.

"China Mobile is always interested in overseas expansion, especially breaking into emerging markets," Lo said, noting that its edge in a competitive auction would be its cash pile of more than $11 billion.

Hong Kong- and New York-listed China Mobile also has access to credit from China's huge financial institutions, including policy lenders such as China Development Bank, which led financing earlier this year for State aluminum giant Chinalco's $14 billion stake purchase in global miner Rio Tinto.

China Mobile dominates the domestic market with roughly 400 million subscribers, more than three times the combined customer base of Bharti and MTN, but has a mixed track record in acquisitions.

It came close to buying emerging markets operator Millicom International Cellular in 2006 before pulling the plug on the deal.

Last year, it bought Pakistan's Paktel Ltd from Millicom for $284 million. China Mobile was also rumored last year to be eyeing MTN, but denied at the time that a deal was in the works.