'Reliance Communications favourite in merger talks with MTN'

LONDON: India's Anil Ambani-led Reliance Communications is the favourite in global merger talks with the African mobile phone operator MTN, after Bharti Airtel of India withdrew from the race, media reported said on Sunday.

MTN and Bharti fell out over the structure of a combined group.

According to a report in The Sunday Times, Arun Sarin, the chief executive of Vodafone, will tell shareholders on Tuesday that he will not be drawn into bidding for MTN after the African mobile-hone operator abandoned plans to merge with Bharti Airtel.

The London daily quoted sources as saying that Bhartis domestic rival, Reliance Communications, is the favourite to land MTN.

Vodafone had considered a 20 billion pounds bid for the company, which has 68 million customers in 21 African and Middle Eastern markets, before publicly declaring two weeks ago that it would not proceed.

Instead, it is still keen to buy out its partner Telkom from their joint venture Vodacom in South Africa, a deal that crumbled late last year.

According to the report, Sarin is keeping a keen eye on China's telecoms market, which is restructuring to create stronger competitors to China Mobile, in which Vodafone has a 3.3 per cent stake.

China Mobile, which is recruiting seven million new subscribers every month, will absorb China Tietong Telecommunications, a fixed-line operator. The Chinese government plans to issue three 3G licences once the reorganisation is complete.