New Delhi  - Indian telecommunications major Bharti Airtel announced Saturday that it had called off talks with South Africa's MTN on a possible merger.

Bharti, India's largest telecom player, had entered into "exploratory discussions" on the possibility of combining the two companies and the two sides had reached an in-principle agreement on May 16, a statement by Bharti Airtel said.

The statement said that MTN had presented a a new structure that envisaged Bharti Airtel, which is partly owned by Singapore Telecomunications (Singtel), becoming a subsidiary of the South African company. Singtel holds 30.5 per cent stake in Bharti Airtel.

"Bharti believes that this convoluted way of getting an indirect control of the combined entity would have compromised the minority shareholders of Bharti Airtel and also would not capture the synergies of a combined entity," the statement said.

It also said the merger would have compromised Bharti's vision of transforming itself from a home-grown Indian company to a true Indian multinational telecom giant. "This was completely unacceptable to Bharti," the statement said.

It said discussions went on till late Friday night without a breakthrough and Bharti had decided to disengage itself from the talks and had intimated its decision to MTN.

"Bharti would also like to thank over a dozen internationally reputed bankers from the US and Europe who have given confident letters of funding of over USD 60 billion," the company said.

A merger between Bharti Airtel and MTN would have created the world's sixth-largest mobile operator.

MTN operates in 21 countries in Africa, the Middle East and Central Asia, including South Africa, Nigeria, Uganda, Syria, Iran, Afghanistan and Yemen, and had 62 million subscribers at the end of March 2008.

Bharti Airtel had 61.98 million mobile customers at the end of March 2008 and is valued at about 45 billion dollars. (dpa)