State run Indian telecom major  BSNL, is reportedly backing out of the deal with the Vavasi group to accquire shares in Zain. Though cash rich, with about 10 Billion dollars in its coffers, the operator is looking at growth in India with expected out flows for 3G spectrum, WiMax licenses and a growing wage bill.

While it may be interested in parts of the deal, it does not see Zain as a feasible buy. Recently the operator hired BCG (the Boston Consulting Group) to help it devise strategies to compete with home grown private operators like Airtel and Reliance.