Brand Bharti arrives on the global stage

The merger of South African giant MTN with Sunil Bharti Mittal���s Bharti Airtel will be a formidable combine in the global telecom market in terms of subscriber base, global footprint, market cap and employee efficiency.

MTN-Bharti combine will be the world���s fourth-largest telecom operator in terms of subscriber base, beating giants AT&T, France Telecom, and Verizon. It would have over 200 million (20 crore) subscribers, far ahead of AT&T���s 141.8 million and France Telecom���s 123 million.

The deal will also give Bharti a much larger footprint that will cover 22 countries across West Asia, Africa and Asia. Bharti would thus get catapulted into the ranks of global operators such as Spain���s Telefonica with a presence in 25 countries, and France Telecom with a reach into 30 countries.

In terms of market capitalisation, Bharti-MTN would become the ninth-most valuable telecom operator in the world based on latest data. At $61.5 billion, it would be more valuable than France Telecom (market cap of $61.1 billion), Deutsche Telekom ($50 billion), and China Telecom ($35.8 billion).

Before the proposed merger, Bharti was ranked 13th while MTN was 18th in terms of market cap. In the past four quarters, Bharti and MTN together earned a net profit of $3.6 billion on sales of $20.7 billion. In terms of revenue, the merged entity would be bigger than the Norway-based Telenor (revenue $16.6 billion) and South Korean SK Telecom ($13 billion).

The merged company will also run the second-most efficient operations among the world���s top 10 in terms of revenue per employee. With a current employee base of 14,085, its combined revenue per employee would be $1.4 million, second only to $2 million for Japan���s NTT Docomo.




Analysts feel that the deal would give more bargaining power to the combined entity while negotiating contracts with equipment vendors. ���Bharti has a strong presence in the fast-growing Indian market while MTN has equally strong subscriber base across various countries.

As a result, together the combined entity will have a greater clout, which will help in better negotiation of vendor contracts,��� said India Infoline���s telecom analyst Bhavesh Gandhi. However, there may not any immediate benefit to India���s biggest telecom operator, as the deal is essentially a long-term strategy for the Bharti Group, he added.