The effort by Bharti Airtel to acquire the Africa business of Zain for $10.7

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billion is unlikely to be stalled by efforts of Econet Wireless, a five per cent stakeholder in Zain Celtel Nigeria BV — if history is an indication.

Econet has raised objections to the deal, saying that under the agreement with Celtel (now Zain) it has the right of first refusal. A spokesman for Econet Matt Ridsdale confirmed that the company had objected to the deal between Bharti and Zain. But this is not the first time that Econet has raised objections on sale to a third party — without success.

Bharti and Zain are in exclusive talk till March 25 to forge a deal whereby the Indian telecom major will pick up the African assets of the Kuwait-based company.

(Meanwhile, PTI says Bharti and Zain are likely to sign a letter of intent by the end of this week for the proposed $10.7 billion deal quoting the Kuwaiti newspaper Al-Rai. The paper did not source its report to anyone).

In 2003 when Vodacom of South Africa acquired the Nigerian unit, Econet raised objections. But Vodacom was able to acquire the unit. In 2006, Celtel a subsidiary of Zain picked up 65 per cent stake in the company. Once again, Econet moved the court. Again it was unable to stall the deal.

In a statement Econet said it was pursuing arbitration proceedings against Celtel and others to challenge the transaction by which Celtel attempted to purchase a majority stake in Vee Networks (now Zain Nigeria).

“Under the terms of the original shareholders agreement, Econet had the right of first refusal over the stake, a right which was denied in 2006. In those proceedings Econet made an application for interim measures to prohibit Celtel (now Zain), from selling, transferring, disposing of, dealing with or otherwise encumbering the disputed stake until such time as the Arbitral Tribunal has published its final award,” the statement said adding that it was in response to this application that Celtel had provided certain undertakings to preserve the status quo. And these undertakings should be applicable in the case of Bharti’s move to acquire Zain Africa, it said.

The history of telecom in Nigeria is a convoluted thread. Zain’s Nigeria unit was set up as Econet Wireless Nigeria in 2001, named after the South African holding company Econet Wireless International.

In 2003 Vodacom of South Africa entered into talks to buy the company. Econet declined the takeover offer. Despite Econet’s objection, in 2004 Econet Wireless Nigeria was renamed Vee Networks and branded Vodacom. Econet moved the court against the move.

Within less than two months, Vodacom pulled out of the contract. The Nigerian ministry of finance took over the management control of the company and it was branded V-Mobile. In May 2006, Celtel International, a subsidiary of MTC Group (now Zain) reached an agreement with Nigeria to acquire 65 per cent in V-Mobile for $1.005 billion. In September 2007, MTC Group, re-branded the unit to Zain and by August 2008 it had done so for all Celtel operations in Africa.

Econet had started legal proceedings against Vee Networks shareholders and Celtel seeking to declare the sale as void. The case is pending in the court.

If the proposed Bharti-Zain deal goes through, the Nigeria unit will be re-branded for the sixth time.