Bharti Airtel has called off negotiations with MTN for a possible acquisition of the South African telecom company, for an estimated $45-50 billion, alleging that MTN veered off the agreed terms of transaction.

"An in-principle agreement was reached on 16 May and a term sheet was initialled between two lead bankers... MTN has now presented a completely different structure, from what was agreed," Bharti said in a statement.

The new structure presented by MTN envisaged Bharti Airtel becoming a subsidiary of MTN and exchange of majority shares of Indian company held by Sunil Mittal, promoter of Bharti, family and its foreign partner Singtel, in exchange for a controlling stake in MTN.

"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 company said.

Bharti and MTN started merger talks early this month to create an emerging markets giant and the world's sixth largest mobile phone company with over 130 million subscribers in around two dozen countries.

Bharti, 30.5 per cent owned by Singapore Telecommunications, was eyeing a 51 per cent stake in MTN, either through acquisition or a merger, in a deal that would value MTN at around $50 billion.

Talks were cordial throughout this period and conducted in good faith. Bharti also claimed to have tied up funds of over $60 billion with over a dozen banks in the US and Europe.

The price of shares have also been settled and frozen at an agreed point to confirm that there was no further discussion on the share price of MTN.

Other probable contenders for MTN included Emirates Telecommunications (Etisalat) and China Mobile, the world's biggest mobile carrier.

MTN, Africa`s biggest mobile operator, is present in some of the world`s most lucrative markets, such as Nigeria, Cameroon, Ghana, Zambia and Uganda.

MTN, which is behind Vodacom - a joint venture of Telkom and Vodafone Plc – in South Africa, is well placed in other African markets and oil-rich Iran.

Bharti shares closed the week on the Bombay stock Exchange up 2.4 per cent at Rs836.80 even as the market fell 1.5 per cent.

Shares of MTN were at 155.65 rand on the Johannesberg exchange, valuing it at around $38.5 billion.