Now the Dragon eyes the Lion

Is China Mobile in the MTN hunt?

China Mobile has publicly admitted that it is interested in the South African mobile market but has not yet formalized an offer for MTN, the subject of takeover interest by India's Bharti--see my "Poaching in Africa: Bharti's Hunting MTN."

"China Mobile has not joined the MTN bidding, but we are interested in the South African market and we are looking at various opportunities for entering that market," China Mobile CEO Wang Jianzhou stated today after the company's annual meeting. Earlier this week I relayed that Bharti's approach could spark a bidding war for MTN, citing a UBS report that suggested China Mobile, among others, could be interested in bidding for the operator.

Godzilla chasing Bambi?

According to the GSMA's Wireless Intelligence, China Mobile dominates its domestic market with approximately 385 million subscribers as of end first-quarter 2008. This is almost THREE TIMES the  combined customer base of both India's Bharti and MTN's multiple operators. Reuters notes that China Mobile has a mixed track record of acquisitions, stating that it came close to buying emerging-markets operator Millicom International Cellular in 2006 before pulling the plug on the deal. In May 2007 it made its first and only overseas acquisition to date, buying Pakistan’s Paktel Ltd from Millicom for US$460 million.

China Mobile was also rumored last year to be eying MTN, but denied at the time that a deal was being considered. In February, China Mobile opened an EMEA headquarters in London, stating that emerging markets in Africa and the Middle East are priorities for the operator this year. We're now in the deny and chaos stage of takeovers. Given China's presence in throughout Africa and it's growing need for core resources it is a natural strategy to purse. 

There are probably two more iterations in this dance, one feigned interest in MTN by a conglomerate, then either admission or escalation regarding a another bid for MTN by Bharti. Too bad all the action is thousands of miles away from the good ol' USA.