The deadline for exclusive merger talks between India’s Bharti Airtel and MTN group of South Africa will expire today, with little clarity on whether the companies' efforts to create a new mobile behemoth with 200 million subscribers across developing nations will succeed or fizzle.

The two companies have been locked in negotiations since May, when they revived talks that had failed a year earlier. The current discussions were originally set to end on July 31, but have already been extended twice.

If the two side were to hammer out the terms of a tie-up, they could create a mobile giant with $20 billion in annual revenues, drawn from India, Africa and the Middle East — three of the fastest growing markets in the industry.

First, however, they will have to overcome fears in South Africa that MTN risks losing its national identity, and regulatory concerns in India over a proposed dual-listing, which currently would not be allowed under Indian rules.

Asked last night whether there was a chance that the talks could be extended, the Bharti Airtel Chairman Sunil Mittal told an Indian television channel: "I can't say anything. We are all waiting.”

Under the initial terms outlined in May, MTN and its shareholders would take a 36 per cent stake in Bharti while the Indian company would hold 49 per cent of MTN.

Bharti, which is controlled by the billionaire Sunil Bharti Mittal, has increased the cash component of its offer for that 49 per cent stake to $10 billion from an original proposal of $7.6 billion, according to reports.

Additionally, it is understood that Bharti has proposed to pay $4 billion in stock, 7 per cent more than it first offered.

Adding to the potential hurdles for a deal, India last week amended its takeover rules, requiring a company buying 15 per cent of an Indian firm through American Depositary Receipts or Global Depositary Receipts, with voting rights, to make a mandatory offer for a further 20 per cent.

That could cost MTN an extra $7 billion based on Bharti's market value of $33 billion.

Africa and South Asia are seen as key regions for mobile players struggling to boost subscriber numbers in saturated western markets.

However, each territory presents challenges — not least the rock-bottom tariffs levied to win over the poor rural customers that are driving subscriber growth.

The current negotiations come about a year after Bharti and MTN last spoke on a proposed tie up, in talks that broke down over disagreements in the deal structure.

After those earlier talks failed with Bharti, MTN entered an exclusive round of negotiations with RCom, the Indian mobile group controlled by the Indian tycoon Anil Ambani, but again failed to agree a deal.

In May, a Bharti spokesman said of the current talks: “The broader strategic objective would be to achieve a full merger of MTN and Bharti as soon as it is practicable to create a leading emerging market telecom operator which today would have combined revenues of over $20 billion and a combined customer base of over 200 million.”

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