Mobile carrier MTN on Friday withdrew its cautionary notice, saying talks between itself and India's second-largest mobile carrier Reliance Communications had broken down.

"Owing to certain legal and regulatory issues, the parties are unable to conclude a transaction," said MTN in a statement released to the JSE 36 minutes after the South African market closed.

"Accordingly, it has been mutually decided to allow the exclusivity agreement to lapse and caution is no longer required to be exercised by shareholders when dealing in MTN securities," MTN added.

A 45-day exclusivity period between them expired earlier this month and a 15-day extension was due to end on Monday.

MTN's announcement comes just hours after Indian media reported that Reliance Communications' proposed tie-up with the mobile telecoms giant could be derailed by the bad blood between the Ambani brothers, who own Reliance.

The corporate war between the two brother, who have reportedly not spoken since 2002, when the death of their father led to a break-up of the family conglomerate, intensified on Thursday when the older brother filed arbitration proceedings.

According to India's Economic Times, Mukesh Ambani-owned Reliance Industries said it has started arbitration proceedings against younger brother Anil Ambani's Reliance Communications to thwart the merger with Africa's largest telco MTN.

There have now been calls for India's prime minister to intervene in the family spat, with political parties believing the MTN tie-up may be good for the country.

Shares in MTN closed 2.76 percent or 3.70 rand lower at 130.30 rand on the JSE on Friday.

But a local dealer said the after-market announcement was bound to have an impact on the shares come Monday.

I-Net Bridge