Indian state-run telecom Mahanagar Telephone Nigam is looking to move ahead with a consortium bid for Kuwait telecom Zain and is also interested in buying a stake in Zambian telecom firm Zamtel.

Chairman R.S.P. Sinha said MTNL and another state-run telecom, Bharat Sanchar Nigam Ltd would join a consortium with Indian firm Vavasi and a Malaysian investor to buy a 46 stake in Zain being sold by a group including Kuwaiti family conglomerate Kharafi Group.

We are going with Bharat Sanchar, Sinha told reporters on Thursday, adding as state-run firms there were a number of requirements to be met as part of the bid process.

For example, the companies would have to advertise for expressions of interest from merchant bankers to advise them, Sinha said, without giving an expected timeframe.

The state-run firms would also need approvals from different ministries and the cabinet for a deal to be completed.

On Monday, BSNL's chairman said the consortium was interested in a stake of more than 50 percent in Zain

ZAMTEL STAKE

Sinha said MTNL had expressed interest in buying a stake in Zamtel, which the Zambian government plans to sell up to 75 percent of as part of a privatisation drive. [

Sinha said MTNL had signed a non-disclosure agreement. Zamtel is Zambia's only licensed fixed-line provider of voice and data communications and had revenue of $100 million in 2008.

After Sinha spoke, the Zambia Development Agency said Zamtel had attracted more than 30 suitors and shortlisted bidders would be announced on Oct. 21.

Indian firms are increasingly looking at telecom assets in Africa, which analysts say are the last of unpenetrated markets. India's Reliance Communications and Essar Group already own telecom assets in Africa, while tie-up talks between India's Bharti Airtel and South Africa's MTN broke down last week.

Sinha said Nigeria's Bureau of Public Enterprises (BPE) had disqualified MTNL from bidding for a 75 percent stake in state-run telecom Nitel because of its low equity base.

Nigeria, Africa's biggest telecom market, wants bidders for Nitel with equity base of at least $200 million, Sinha said, but did not answer a question whether MTNL was out of the race.

We have written to them on that. Our net worth should be considered, not equity base, he said.

MTNL has a market capitalisation of about $1.1 billion

Earlier this week, Nigeria extended the deadline for expressions of interest in Nitel to Oct. 26. 

 (Editing by John Mair)