New Delhi, Mumbai, May 6: Bharti Airtel, the country’s largest mobile operator, which on Monday confirmed that it is in ‘exploratory’ talks with South African telecom firm, MTN for a possible transaction, would get catapulted as the fourth largest operator in the world by subscriber base if the deal goes through.

In September last year, Bharti’s total subscriber base touched 50 million making it the tenth largest mobile operator globally. Currently, the top slot is held by China Mobile with a user base of more than 350.7 million, followed by Vodafone, which has more than 250 million users, China Unicom comes third at 158.1 million. Bharti, currently has about 64 million users and MTN would bring it another 68 million.

Apart from the high subscriber base, which apart from enhancing its image as a global telecom firm, Bharti would also be able to effectively ward off any competitive threat from the number two and three operators back home – Reliance Communications and Vodafone-Essar.

With Rcom getting into GSM and mobile number portability becoming a reality by middle of next year, Bharti would definitely face severe competition. In fact, acquisition of MTN would clearly provide an edge to Bharti in subscriber terms as South Africa is the most attractive market in terms of emerging markets and could easily lead the company to notch 200-300 million subscribers in the next few years. While India and China may be the fastest growing markets currently, the momentum would comparatively slow down here generating only about 100 million additional users. Further, with seven to eight operators in each circle the churn rate is going to be high.

Another big benefit MTN would bring to Bharti is global scale as the former is present in 21 countries of South Africa and Middle-East. A global network of this kind would benefit the company in terms of international roaming as its own network would be present in most of the regions.

Venturing into the overseas markets would also bring high average realization per user (Arpu) customers into Bharti’s fold, which would add to its bottomline in the long run. Arpus in India are lowest the world over with average hovering around $7-8 a month as against an average of $18-20 a month in most of the countries MTN operates in.

However, the company may face difficulty in managing the wide footprint of MTN spread over 21 countries mostly in South Africa and middle-east countries, where the governance structures are quite different.