Bharti Airtel, which is looking to acquire a majority stake in South African telecom provider MTN, is reported to be looking at sovereign Gulf funds to finance the deal even as Emirates Telecommunications (Etisalat) of the United Arab Emirates said it was eying a stake in the South African telecom company.

Etisalat, which is planning to acquire a 10 per cent stake in Tata Teleservices, is also eying MTN as part of its expansion plans.

"We are always looking for expansion in Africa. We are evaluating MTN, among other companies." reports quoted its chairman Mohammed Omran as saying in Cairo.

MTN, which serves 51-million users in 16 countries across Africa and Asia, has spent $5 billion over four years to roll out operations in Egypt and Saudi Arabia and to buy into a Pakistani operator.

Omran wants Etisalat to earn at least a quarter of its revenue from Africa within four years.

Bharti has already negotiated $12 billion in financing from a group of banks that includes Standard Chartered Plc. But it has not yet made any bid.

Bharti has roped in Singapore Telecommunications Ltd for its MTN bid. SingTel, Bharti's largest shareholder, holds over 30 per cent stake in Bharti Airtel.

A combination of Bharti Airtel and MTN would create the world's sixth-biggest mobile firm with around 130 million subscribers.

While Bharti has won the support of a major investor, Azmi Mikati, CEO of M1 Group, which also owns 9,82 per cent of MTN, it is likely to stumble upon several critical regulatory minefields in its bid to acquire MTN's telecom business across 21 countries.

The bid for a 51 per cent stake, initially valued at $20 billion and still climbing, will be more than a test for Mittal's negotiating skills.