I had mentioned about it earlier(and this link) that Bharti would be looking forward to buy out MTN with Singtel’s help. They don’t have enough money (and guts) to venture out; it’s too early in their life cycle to take big gamble and risks like these. Although Sunil Bharti Mittal promotes himself agressively (and is probably not rich enough like Mukesh Ambani), he is spreading himself out too thin (witness his forays in Retail). I doubt whether he’d go under but has been willing to act as a front for Singtel’s acquistion.
Here is the published story from Business Standard with all legal flotsam. Of note here is the following:
1) Sunil Mittal, the founder of Bharti Airtel, plans to set up a separate company in partnership with Singapore Telecommunications (SingTel) that will be the vehicle for acquisition of the South Africa-based MTN Group.
2)The SPV (Special Purpose Vehicle) may be registered in a tax-haven country, like Mauritius or Bahamas, the sources said.
3)When contacted, a Bharti Airtel spokesperson said: “We have already issued a statement and have nothing further to add to our last statement. “At this stage, MTN is not commenting further than the cautionary announcement released on May 5, 2008,” an MTN spokesperson said.
4)As equipment and software purchases are huge for telecom companies, the merger would give joint bargaining power to Bharti.
5)”The SPV would also look at listing on the New York Stock Exchange, where valuations of telecom companies are relatively higher,” said a source. The SPV would also be the vehicle for the Bharti Airtel-MTN combine’s future acquisition plans in the US and Europe.
I stand vindicated regarding my future predictions and the fact that Bharti is looking forward to leverage it’s position in purchase agreements. This is in addition to create monopolistic telephone operators which would limit the choice to the consumers.
Pity that these morons can’t extend something to Broadband initiatives. All this is being done prior to the auctioning of 3G licences. Bharti wants to have an exciting piece of this cake. Let’s see who spoils their party….
iPhone (or the “jesus” phone) would be marketed here in India by Vodafone (and perhaps Bharti Airtel). By all accounts it would be the crappy 2G stuff while rest of the world would see 3G version being rolled out.
iPhone is seriously making a dent in Blackberry’s business model; although as a general user, it doesn’t impress me. Job’s reality distortion field has had it’s effects.
If it is priced beyond 20k, it would be of no use unless one really wants to blow up serious money. It means either you are a bank robber or have amassed hue amounts of money and don’t want Government of India to know about it. A much better option would be to get a smuggled handset from one of these “chor bazaars”, haggle over the price (minus any gurantees) and pray that it doesnt go kaput. Useless option. Vodafone India is being managed by a set of nuts who can at best scratch them without applying their minds to it.
Published on
18th May 2008 in
Indian Telecom.
Tags: Airtel, Anil Ambani, BSNL, India, Internet, Landline, MTNL, Opera, Reliance, TRAI, Wifi.
At times the bozos sitting up and making rules seriously surprise me. They have called for implementation of Internet Telephony and Carrier Access Codes.
This was mandated much earlier way back in 2001; however, this was opposed by Bharti. Reliance had entered with the premise of “death of distance” and had made STD calls ridiculously cheap. At that time, Dhirubhai Ambani was still alive and Mukesh and Anil Ambani were still brothers in arms.
If Internet telephony is implemented in it’s present shape, it would see present rates crashing down to a large extent. It would give a new lease of life to ISP’s like Sify and other fringe lunatics to scale up investments. I can foresee the entry of players like Skype as well as other SIP players which rely on open standards. It’s hard not to imagine the real gains to economy as a whole and it would benefit the adoption of setting up of WiFi hotspots on a larger scale.
Carrier access codes means that one can choose his/her service provider and each of the incumbent telecom operator in fixed line business has to provide that option. It means that you can choose Airtel landline to use BSNL’s calling cards to call up you mother in law in Timbuktoo. Granted that mother in laws should remain far away without casting their evil eyes on their kids…..
The major player that’s going to get hurt is BSNL (and MTNL). Unless, they improve their services which are required in the present set up, people are going to abandon them like rats on a sinking ship.
Although, this isnt new and TRAI has probably dusted off it’s old files from it’s dingy offices, still, all compliments to them to even think of doing such a thing. This comes as a breath of fresh air indeed.
It sounds too good to be true. Some “vigilant” NGO filed a case against Vodafone for it’s spurious campign to promote more usage of talktime. There were enough suckers to join the fun. The consumer court ruled that this is akin to using lottery/ gamble.
Now we all know that Indians make such a hue and cry about morals that its embarassing. Nevertheless, the court ruled in favour of the NGO which had filed a case and fined Vodafone India to the tune of 50 lakhs.
I am sure that lawyers are cheaper than paying up the fine. I would be surprised indeed if Vodafone pays up meekly. Although, it is nothing as compared to their projected earnings.
The new version 4.1 has been released recently. I find this an excellent browser for mobile phones; although being stuck with Vodafone as my service provider means that I cannot use it on my Internet enabled Nokia.
Here is a list of the new features. You can download this application from here:
http://www.operamini.com/download/
Bharti first denied and then offered $20 billion dollars for this company in South Africa. They have these laws which mandate than 20% of the marked up capital of a company (or shareholding pattern) should remain with Blacks. if Bharti manages to win this bid (and fatten the purses of the majority of the shareholders), it would be sixth largest combine in the whole world.
This would give it significant leverage for Network equipment and of course, access to global capital and lobby circuits. This should be good news, although I remain circumspect of its real intentions. I shouldn’t be surprised to know (or for that matter anyone) that we don’t know the exact state of Bharti’s profitability. They don’t declare their assets publicly (as far as I know) although, I have read news about their claims to profits. As they grow in size, they tend to acquire more monopolistic and bureaucratic attitudes and can easily ignore the growing customer user base.
Such a monolithic cannot be taken to task unless the Government steps in to protect the customer’s interests.
For the same reason, I have been opposing the mergers and acquistions; more players in the market doesn’t mean more choices for the customers. They would be scaling up infrastructure from ground up and cashing out to the existing companies; although the ones which have been granted licences recently, would be happy to comply rather than compete with stiff entry barriers. The existing players benefit from the incumbents spectrum. Although, there have been laws designated to avoid this; law is an ass and lawmakers are assholes hand in glove with them.
Hence, Bhart courting MTN is nothing new given the scale of money that it could find from it’s parent (Singtel); I have a strong reason to feel that Bharti is merely acting as a front for more sinister evil gameplans.
This is an interesting story in Linux Watch which says that Verizon would include Linux based handsets.
What caught my eye was this statement,”
In most markets, including the U.S., carriers have the most power to determine which mobile phone models ultimately reach consumers”.
Mercifully, we have a real choice in India unless you want to include telecom players like Reliance and Tata who have handsets manufactured in the grimmy Chinese factories which employ child labour to a large extent (my assertion). Anywhere else, for instance in a “civilised society” this would have been horrendous!
