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The rapid consolidation of operators Africa and the Middle East continues, and a few superpowers are emerging. Pan-regional player Zain (formerly Celtel) was, until recently, expected to be one of them, but instead it is being broken up. It has already sold most of its African operations to India's Bharti Airtel - definitely looking to be the 'Vodafone of the emerging markets', and now it has received an offer for a stake in its remaining units from Etisalat, the largest telco in the United Arab Emirates. This could lead to full buy-out in future, many regional analysts believe.

The size of the stake involved in this offer is not disclosed, though the regional CNBC channel reported it to be 46% at $5.97 per share. This would give the acquirer a controlling stake, as 10% of the shares are held by the treasury and would probably reflect a total price between $10.5bn and $12bn.

It would certainly strengthen Etisalat's aim of creating a dominant base all round the Middle East, a relatively small but high value/high growth mobile market. Many players whose main business is in a saturated and/or low margin territory are attracted to the better margins of the to-date under-penetrated Middle East.

Etisalat has confirmed it has made a preliminary offer to buy a stake in Kuwait-based Zain (officially called Mobile Telecommunications Co). "Etisalat has submitted a preliminary conditional offer to buy a stake in Zain," Ahmed bin Ali, an SVP at the UAE group, said in a statement. "Concluding this offer depends on the fulfillment of certain requirements and conditions necessary to finalize the deal." Zain's board did not confirm they were aware of the deal, indicating Etisalat had approached shareholders directly.

Both firms' shares rose on the reports, indicating the need for consolidation and pan-regional operators to achieve regional roaming and economies of scale.

The shareholders to whom Etisalat has made its offer are thought to include the Kharafi family, who own nearly 25% of the company, and other investors associated with them, according to the Financial Times.

Etisalat has more than 100m customers across 18 countries in the Middle East, Africa and Asia but wants to reduce its dependence on the UAE, which generates 85% of its income. Zain has operations in eight countries in the Middle East, and a customer base of around 34.2m. Etisalat has also been rumoured to be interested in a stake in Reliance Communications in India.

Gulf telecom carriers have spent more than $33bn on acquisitions since 2006, analytics firm Dealogic estimates.

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