* Bharti, MTN extend exclusive talks till Sept. 30
* Firms say talks progressing satisfactorily
* Sources say latest extension likely to be the last
* Analysts say deal too complex; uncertainty over completion
* Bharti, MTN shares fall in firm markets
(Adds sources saying this is the last extension)
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 No. 3 mobile firm, frustrating investors and raising concerns the deal's structure was too complex to succeed.
Two sources with knowledge of the deal said the latest extension was likely to be the last for talks, which would create a firm with more than 200 million customers across India, Africa and the Middle East.
In separate statements, Bharti and MTN said discussions to merge their operations were progressing satisfactorily, though no decision had been taken on the deal.
Both firms agreed to extend talks to Sept. 30, after previously extending discussions by one month to Aug. 31, as they negotiate a complex $23 billion cash and share swap deal aimed at an eventual full merger.
"This will be probably the last extension. It's more likely there will be a conclusion than calling the talks off," one of the sources said.
Investors were frustrated by the delay in reaching a deal.
"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.
Shares in Bharti, valued at about $32 billion, unwound gains after the statement and closed down 1.2 percent in a Mumbai market that gained 1.4 percent.
"The stock is not going to outperform till this is sorted out," Chawla said.
MTN, valued at $29 billion, was down 2.5 percent in Johannesburg, lagging a 1.2 percent rise in the JSE Top-40 index
BIGGER PREMIUM WANTED
The deal would give both firms exposure to new markets, 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 is advising Bharti Airtel, while Bank of America Merrill Lynch and Deutsche Bank are 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 Rupert Winchester)