Celtel's chief strategy officer Terry Rhodes said the purchase price was generous as it reflected a number of factors. Firstly, Celtel reported a profit of $147m in its last financial year. With telephones reaching only 5% of the population in 10 of the countries where it operates, the potential for growth was enormous. Moreover, stock markets were rewarding telecommunications players in emerging markets, so a listing would have placed a relatively high value on its shares.

MTC said it would fund the acquisition through a combination of existing cash and new debt. Financing for the transaction was been arranged by a group of four major financial institutions  UBS Investment Bank acted as financial adviser to MTC.

Celtel would remain as a separate entity within the MTC group, retaining its existing management structures and continuing to operate under its brand name.

"In the past Celtel deployed European and American funds to assist the development of telecommunications infrastructure in Africa. Today we are engaging the Middle East in this process," said Mo Ibrahim, the founder of Celtel who joined a new board following the acquisition. "This transaction represents a key step in bringing these sources of wealth to support the development of Africa."