The MTN-Orascom deal faces yet another hurdle as Zimbabwean officials limit how much of Telecel Zimbabwe MTN will be allowed to buy.
Africa's largest mobile operator, MTN, and Orascom confirmed last week that discussions were under way that could see MTN buy up the Egyptian-based business's African assets. Zimbabwe's Telecel is one of the possible acquisitions, and Orascom currently holds 60% of the business.
However, reports from Zimbabwean media indicate that local officials are unhappy with the deal, and the country's laws may prevent MTN from taking more than 40%. Reports also indicate that Orascom was never supposed to hold onto the full 60% of the business, but was required to pass 20% on to Zimbabwean citizens in 2007.
While Telecel is unlikely to be MTN's primary target in the deal, it does represent a coup for the pan-African business. Earlier this year, Telecel's subscriber numbers doubled from around 500 000 to a million active SIMs.
Analysts say a Zimbabwean operation could be a future goldmine for MTN, specifically if the country's political situation stabilises over the next five years.
This is the second country to complain about a possible deal between MTN and Orascom, with the Algerian authorities also presenting potential regulatory problems. Algeria represents a bigger cash cow for MTN, with the Djezzy operation serving just under 15 million people.
According to Algeria's legislation, the country's government has the right to veto the deal, which could see Djezzy being nationalised, instead of handed over to MTN. However, poor relations between Orascom and the Algerian authorities could lead the country to accept the deal, if only to get the Egyptian business out of the country.
The total deal between MTN and Orascom is speculated to be valued at $10 billion, and MTN is rumoured to have approached several banks for half the amount in loans. While MTN has not confirmed it, it is reportedly looking to buy Orascom's units in Algeria, Zimbabwe, Egypt and Tunisia, and will likely get Central African Republic, Burundi and Namibia in the deal.
Orascom also operates in North Korea, Bangladesh and Pakistan.
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