* Emerging markets still attractive for telcos
* Acquisitions back on agenda
* Complexity of MTN-Bharti deal not the killer
By Victoria Howley and Georgina Prodhan
LONDON, Oct 1 (Reuters) - A failed audacious bid to tie up Africa's largest mobile phone company MTN with India's Bharti Airtel is more likely to trigger fresh takeover interest in emerging markets than put off prospective buyers.
The collapse of the $24 billion deal was always likely because MTN is a cherished national champion, but high growth emerging markets still offer attractive targets for acquisitive telecom companies.
With political rather than commercial factors derailing the transaction, which would have created the world's third largest mobile operator, the failure is a statement about the attitude of the South African authorities rather than the health of the mergers and acquisitions (M&A) market.
"That this landmark deal almost happened will lead other operators to pursue deals in Africa. It provides something of an opportunity," said Paul Lambert, telecoms analyst at industry research group Informa.
"Vodafone, France Telecom, China Mobile will definitely look at them (opportunities in Africa) now. Telcos are in an acquisitive mode to offset declining growth in their home markets and they are looking in emerging markets," he added.
MTN was such a difficult target not because Africa is an emerging economic region and not only because of the South African government's stake -- though these elements played their part -- but largely because of its success.
At the end of August, MTN posted headline earnings up 22 percent, revenue up 24 percent and subscribers up 14 percent for the first half of the year.
"MTN is a viable business doing wonderfully well, a global leader, so there is no compelling reason for the South African government to give over control," says Emeka Obiodu, mobile strategy analyst at telecoms and technology research firm Ovum.
"MTN doesn't need a turnaround. This was about scope."
The case of MTN contrasts with Vodafone's successful acquisition of a majority stake in state-run Ghana Telecom last year, which was both loss-making and debt-laden.
Despite resistance from opposition politicians who branded the sale a "sell-out", Ghana's government decided to take the $900 million sale proceeds and invest it in state funds.
A France Telecom-led consortium also managed to buy a majority stake in Telkom Kenya in 2007, after several years of losses at the Kenyan incumbent. Most of France Telecom's new customers in the first half came from its African operations.
A banking source, who asked not to be named because he is unauthorised to speak to the press, said on Thursday that operators including Vodafone and France Telecom had already run the slide rule over Zain's African operations.
These fast-growing assets could become available again if Kuwaiti conglomerate the Kharafi Group's sale of a 46 percent stake in the Zain group falls apart.
ACQUISITIONS ON THE AGENDA
Large, emerging-markets acquisitions are still unpopular with telecoms investors, who generally favour the sector for its steady cashflows and dividends rather than growth prospects.
Vodafone, the world's largest mobile phone firm by revenues, has pleased shareholders by guiding that it is only interested in in-market consolidation rather than ambitious mergers, even though its organic sales are falling.
But current market conditions coupled with a prolonged downturn in home markets may persuade normally conservative Western telcos that current opportunities are too good to miss.
In other sectors, rallying stock markets have encouraged companies to put long-held acquisition plans back on the agenda.
North American food group Kraft made an approach worth over 10 billion pounds ($16 billion) for British confectioner Cadbury , an asset it has coveted for around two years.
And Finnish retailer Kesko is considering buying in Russia, where the consumer sector has been booming for much of the last decade.
COMPLEXITY
The complexity of the Bharti-MTN proposal, which involved cash and share swaps, dual-listing discussions and competing political interests has also been cited as a reason for its failure, but plenty of other transactions are just as challenging or in some cases even more complicated.
Bankers point to scenarios involving hostile bids, multiple buyers and situations where there is a side sale for some of the assets as the most challenging in the dealmaker's repertoire.
This hasn't stopped tough deals from happening.
Carlsberg and Heineken bought underperforming UK brewer Scottish & Newcastle last year for 7.8 billion pounds, splitting the assets between them to avoid overpaying as well as anti-trust concerns.
(Additional reporting by Nicola Leske in Frankfurt, Editing by Sitaraman Shankar)