A big jump in the number of mobile phone subscribers in Iran last quarter was welcome news for MTN Group, but potentially troublesome for US banks eyeing a role in the South African telco’s planned $20 billion-plus merger. When MTN and India’s Bharti Airtel first discussed a tie-up more than a year ago, MTN had around 6 million users in Iran. Its business there, and in Sudan and Syria, has since grown — a fact that has not escaped US banks milling around the deal.

Nobody in Washington DC is saying publicly that US banks should be barred from playing a role in the merger of the two emerging market telecom companies. Not yet, anyway.

But MTN’s annual report says 13 per cent of its 2008 revenues came from Iran, Sudan and Syria — three states where the US Treasury’s Office of Foreign Assets Control (OFAC) sets tough restrictions on US firms, effectively banning them from most direct and indirect dealings due to US sanctions.

Bank of America-Merrill Lynch is advising MTN on the deal, with Deutsche Bank. Sources involved in the offer say Goldman Sachs is advising Bharti shareholder Singapore Telecommunications, which owns 31 per cent of the Indian company. Both BofA and Goldman declined to comment.

Several other US banks are in talks to provide financing for the merger plan, sources say, which involves Bharti and MTN buying into each other to create the world’s No 3 wireless group.

While US lenders would like a cut of the deal, sources at the banks say there is a lot of discussion at top levels to determine how to proceed within the boundaries of OFAC.