MUMBAI/JOHANNESBURG - India's Bharti Airtel and South Africa's MTN are expected to extend exclusive talks by at least two to three weeks for a proposed merger, four sources familiar with the deal said on Friday.

The two firms in May agreed to hold exclusive talks till July 31 to finalise a deal that could create the world's third-largest wireless group with more than 200 million subscribers but may now extend it, given the complexity of the deal, the sources said.

The talks are firmly on but a lot of complications need to be untangled. We reckon a few days more will help, one source said. All the sources declined to be named as they were not authorised to speak to the media.

They said that while both sides would be working hard on the deal up to next week's deadline, it looked unlikely they would be ready to disclose an agreement because of outstanding issues on the deal structure and on regulatory approval.

A Bharti spokesman said: Beyond what we have already communicated in our press note, we have no further comment to offer at the moment. (Additional reporting by Devidutta Tripathy in NEW DELHI, Gugulakhe Lourie in JOHHANESBURG) (Reporting by Narayanan Somasundaram and Rebecca Harrison; Editing by Ranjit Gangadharan)