One of the main sticking points was the government's request that MTN, Africa's number one operator by subscribers, retain its South African management and a Johannesburg listing after the deal - a structure at odds with current Indian regulations.
However, analysts said Pretoria's view was understandable given that many big South African companies, from miner Anglo-American to brewer SAB Miller, had retained a local listing after shifting headquarters overseas.
"The government, I think, was quite right in saying 'We've got a long history of having dual-listed companies here and it's worked very well, so why not with this one?'," said ABSA Asset Management economist Chris Gilmore.
South Africa's Treasury insisted it supported local companies expanding overseas, especially if that growth was into other emerging markets - part of a 'South-South' push that has taken off since the global financial crisis hit a year ago.
A Treasury delegation went to India a week ago to discuss the proposed transaction, suggesting President Jacob Zuma's administration was not fundamentally opposed to what would have been one of the country's largest foreign investments.
Complex deal
Nor has there been any sign that the collapse of the fiendishly complex deal was due to any shift in attitude to outside investment under Zuma, who came to power in April on the back of union and leftist support but who has not heeded their calls for more pro-poor policies.
"Suggesting that the Zuma government is necessarily closed to this kind of activity is not the case," said political analyst Mike Davies of Eurasia Group in London.
Davies and other analysts dismissed speculation the deal, which would could have led to a full merger to create the world's third-biggest phone group by subscribers, had been torpedoed by communist or union elements inside the ruling ANC.
Even the Confederation of South African Trade Unions, which nearly halted the sale of a controlling stake in Vodacom to Britain's Vodafone Group Plc in May, was notably measured, refusing to confirm its opposition.
"People are trying to say that it was the left in the ANC that scuppered it, but I don't think the communications minister or some of the union people in the cabinet were that important in this," said Nomura analyst Peter Attard Montalto in London.
The stock market reaction to the collapse of the talks on Tuesday gave a clear sign it was not just politicians and regulators who had misgivings about the $24 billion tie-up.
MTN rose 5.5 percent and Mumbai-listed Bharti jumped 11.6 percent.
"We were never in favour of the transaction, so I'm happy to see it's fallen by the wayside," said Chris Wood of Prudential Portfolio Managers, which holds MTN shares.
"I like MTN's existing operations and I don't think they should feel the need to actually do a deal just for the sake of it."
Reuters
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