"Saudi businessman Alwaleed bin Talal is currently considering to submit an offer to buy a controlling stake in Zain," Kuwaiti daily newspaper al-Seyassah said in an unsourced report.

Last week, Prince Alwaleed said that his firm, Kingdom Holding was still in talks with Zain to buy the telecom firm's Saudi assets.

Asked if he would make a new offer for Zain Saudi after the company's previous bid was rejected, Prince Alwaleed said at a conference in Riyadh that Kingdom Holding was still in talks with parent Zain.

Kingdom Holding was one of three bidders for Zain's Saudi unit, which must be sold in order to allow Abu Dhabi-based Etisalat to move forward with its $12 billion bid for a stake in Zain.

Etisalat, keen to expand outside its home market after losing its monopoly in 2007, had offered to buy a 46-percent stake in Zain last September from major shareholder Kharafi Group, a family-run conglomerate.

But the deal has been plagued by delays, including a lawsuit from unhappy Zain shareholders, and Etisalat has twice extended a self-imposed Jan. 15 deadline to finish due diligence.

Earlier this month, a Zain source said Etisalat's attempt to buy the stake had failed, hours after the deal's architect appeared to walk away. But the UAE telco is still interested in the deal, a spokesman said.