When I read the news of the imminent buyout of a South African firm, I was surprised to see that Bharti Airtel is planning to bid for it. At the outset, I ought to have been thrilled at the news of the acquistion because it would be a jubiliation of all sorts. i would love to join the chorus of fawning idiots who claim that “jesus” has been resurrected! Or that we have truly become a “superpower”.

To me, it appears to be cynicism for all practical purposes. I feel that it would be more worthwhile to dig a deeper in this little “mystery”. Airtel’s shareholding is complex. 30% of the stake is owned by Singtel which in turn is owned by Temasek Holdings; part of Ministry of Finance of Singapore. They are state-run investment pools, known as sovereign-wealth funds and have have some $1.5-2.5 trillion to play with; little is known about them. For example, these holdings opened up their books for inspection only in 2005 and have opaque structures.

Why would Singapore be interested in getting a stake in an African Telecom major MTN Group of Johannesburg. MTN, which operates cellphone systems in Africa and the Middle East, could be worth more than $40 billion in its entirety. But then, telecom valuations are known to be inflated more than their worth.

I could not find any references to Temasek Holdings and it’s relation to Chinese. A big conglomerate of telecom operators can effectively bring the equipment suppliers on the table to negotiate a deal for themselves; not everyone is as smart as Reliance. I have no clue as to why Singapore would fund such glitzy takeovers and investments.

Hence, I would only recommend “cautious optimism” to the news of the takeover. Bharti faces competition from other operators as well.

Here is the complete story on NYT.