* Bharti, MTN extend exclusive talks till Sept 30
* Firms says talks progressing satisfactorily
* Analysts say deal too complex; uncertainty over completion
* A successful deal would create No. 3 global telecoms firm
* Bharti, MTN shares fall in firm markets (Adds more quotes, updates shares)
By Devidutta Tripathy and Gugulakhe Lourie
NEW DELHI/JOHANNESBURG, Aug 20 (Reuters) - India's Bharti Airtel and South Africa's MTN Group once again extended exclusive talks aimed at creating the world's third-largest mobile firm, frustrating investors and raising concerns the deal structure was too complex to succeed.
In separate statements, Bharti and MTN said discussions to merge their operations were progressing satisfactorily, though no decision had been taken on a deal which would create a firm with over 200 million subscribers.
Both firms agreed to extend talks to Sept. 30, after previously extending discussions by one month to Aug 31, as they negotiate a $23 billion complex cash and share swap deal aimed at an eventual full merger.
"We do think it's unacceptable that it's been going on for so long. If it's such a complicated deal, why do they even go for it?," said Zwelakhe Mnguni, portfolio manager at South Africa's Stanlib Asset Management, which own shares in MTN.
Bharti and MTN had revived talks in May, a year after previous talks broke down over who would control a merged entity.
Under the revived deal, MTN and its shareholders would take a 36 percent economic interest in Bharti by paying cash and stock and the Indian firm would pay cash and issue global depositary receipts (GDRs) to end up with 49 percent of MTN.
"It simply means the uncertainty continues," said Sanjay Chawla, telecoms analyst at Mumbai brokerage Anand Rathi. "There could be issues on pricing, management representation or Bharti GDRs not wanted by MTN shareholders."
A combined entity would span India, Africa and the Middle East. It would be the third-biggest mobile operator based on subscribers, behind China Mobile and Vodafone, although its annual sales of $20 billion would be dwarfed by China Mobile's $60 billion and Vodafone's $65 billion.
Bharti shares, valued at about $32 billion, unwound early gains to drop 0.9 percent by 0920 GMT in a Mumbai market up 2 percent.
"The stock is not going to outperform till this is sorted out," Chawla said.
MTN, valued at $29 billion, was down 0.3 percent in Johannesburg, lagging a 1.3 percent rise in the JSE Top-40 index.
For a graphic on share performance, click: http://graphics.thomsonreuters.com/089/IN_BHRTI0809.gif
For a Timeline on the talks, click
BIGGER PREMIUM WANTED
The deal would give both firms exposure to new markets ripe for growth, while a full merger, the eventual aim of the talks, would yield cost savings, allow for technology sharing, and provide financial muscle for more expansion, analysts said.
Some MTN shareholders, including South Africa's Public Investment Corporation, have indicated they expected a higher price from Bharti, as they felt it should pay a bigger premium for effective control of MTN.
Both Bharti and MTN have said the structure and terms of the potential transaction may be adjusted..
Separately, a source familiar with the negotiations had told Reuters Bharti might increase its offer by between 5 and 10 percent.
"I find it puzzling. They have been in discussions for quite a while now. It's not great to keep the stock in limbo like this," said Mark Ansley, a telecoms analyst at Cape Town-based Cadiz African Harvest, which also owns MTN shares.
"We have seen it in the past that ratings turn to drift while stocks are kept in limbo in terms of corporate action. It's certainly not good news," Ansley said.
Standard Chartered was advising Bharti Airtel, while Bank of America Merrill Lynch and Deutsche Bank were advising MTN.
Indian telecom firms are rushing to gain a foothold in Africa. This week, banking sources said Bharti rival Reliance Communications has started talks to buy Kuwaiti Zain's African operations. Reliance had held talks with MTN last year but failed to seal a deal. ($1=48.7 rupees =7.95 rand) (Additional reporting by Narayanan Somasundaram in MUMBAI; Editing by John Mair and Anshuman Daga)