Bharti Airtel not seeking new buys, sees local shake up

NEW DELHI (Reuters) - Bharti Airtel (BRTI.BO), India's top mobile operator, is not actively seeking acquisitions, after its $23 billion planned tie-up talks with South Africa's MTN collapsed, the Indian firm's Chairman Sunil Mittal said on Sunday.

With political rather than commercial factors seen as the deal-killer with MTN (MTNJ.J), analysts have said Bharti could look at Kuwait's Zain (ZAIN.KW), Sweden's Millicom (MICC.O) and Egypt's Orascom (ORTE.CA).

"Hopefully sometime soon," Mittal told reporters at the Word Economic Forum, replying to a question whether the company was actively looking at new buys.

"We are taking a break," he said.

Bharti Airtel director Akhil Gupta said last week the company would look at buying a stake in Zain if there was an opportunity, but there was nothing on the horizon.

An international acquisition would open new revenue streams for Bharti Airtel as its home market saturates and cut-throat competition is pushing call charges even lower in a market which already offers some of the world's cheapest call rates.

Bharti has maintained that emerging markets, including Africa, were of interest for acquisitions.

Bharti, which also runs a Mobile operation in Sri Lanka, was interested in Millicom's MICC.BO assets in the country, but Etisalat (ETEL.AD) emerged as the winner of the assets.

PRICE WAR

In India, stiff price competition has clouded the outlook for the once-booming telecom sector as a sharp fall in call charges would hit operators' profitability.

After a strong response to a per-second billing plan launched by sixth-ranked operator Tata Teleservices, India's three leading mobile firms, Bharti Airtel, Reliance Communications (RLCM.BO) and Vodafone Essar (VOD.L), have launched similar plans.

"The question is how long this is going to last," Mittal said of the price war.

"This is a business that needs huge investments, one has to commit billions of dollars," Mittal said, adding lower return on investments would force consolidations in the industry.

"At the end of the day every economic model will require returns and if there are no returns, you will see consolidation," he said.

"World over consolidation has taken place. Wherever there have been more operators, they have been reduced. There is empirical evidence."

India's telecoms regulator is revisiting the country's M&A policy for telecoms and Mittal said operators would take their decision based on the policy.

A senior official at No. 2 player Reliance Communications has said they expected a consolidation in the Indian telecom sector to be kicked off in the next 18-24 months.

Singapore Telecommunications (SingTel) (STEL.SI) has agreed to increase its effective stake in Bharti Airtel to 31.95 percent from 30.43 percent.

When asked if it was planned earlier, Mittal said there was no "roadmap" for SingTel increasing its stake.

(Editing by Paul de Bendern)