UPDATE 2-Orascom Telecom confident on Canada launch

* Orascom (ORTE.CA)(ORTEq.L) confident of regulator approval

* Says does not control Globalive, meets ownership rules

* Sees 6 or 7 possible merger partners for Orascom group

(Adds Sawiris quotes on merger possibilities)

By Alastair Sharp

CAIRO, Nov 17 (Reuters) - Egypt-based mobile operator Orascom Telecom still aims to launch a Canadian operation this year after a knock-back from regulators, and has mergers on its mind, too, Chairman Naguib Sawiris said on Tuesday.

Globalive, a start-up wireless carrier in which Orascom says it has an indirect stake, hopes to launch a wireless service in Canada and challenge the country's established Big Three carriers for mobile phone subscribers.

The Canadian telecommunications regulator ruled last month, however, that Globalive was effectively under the control of its Egyptian-based financial backer and therefore did not comply with Canada's foreign ownership rules.

"We are set to launch before Christmas," Sawiris told a news conference in Cairo, referring to the Canadian operation. He said he was confident regulatory approval would be sorted out by then.

"There were some barriers to our control over the company there. We are not controlling the company and are sticking to all their terms," Sawiris said.

Globalive bought wireless spectrum for C$442 million ($421 million) in a government auction last year designed to bring more competition into a market dominated by the country's established wireless providers, BCE (BCE.TO), Telus Corp (T.TO) and Rogers Communications (RCIb.TO).

ORASCOM GROWTH

The Canadian regulator says Orascom owns 65.1 percent of Globalive's equity, has entered into a strategic technical arrangement with Globalive, and controls and holds the Wind brand under which Globalive had been set to operate. It also holds the overwhelming majority of Globalive's outstanding debt.

Globalive, which had secured $700 million in financing from Orascom, said earlier this month that talks with new financial backers had stalled and its business was in danger following the regulatory ruling.

Sawiris, who this week stepped down as Orascom's CEO, said that in his reduced role at Orascom he would have more time to focus on the long-term future of the firm he established in 1998, including the possibility of a merger.

He said the firm had identified "at least six or seven suitors" for a possible merger but would only consider deals with firms of a similar size where Orascom would retain "a major say".

We are not limiting the geography of these companies," he said when asked about potential partners.

"We operate in North Korea and we operate in Canada, so you can take a line from there and see everything in between, including Europe," Sawiris said.

Apart from the planned Canadian operation, Orascom operates in emerging economies including Algeria, Pakistan and Bangladesh and even has a presence in Zimbabwe and North Korea.

Sawiris said any deal would depend on factors including management and shareholder chemistry and suitable legislative and regulatory environments. (Additional reporting by Marwa Rashad; Writing by Alastair Sharp and Cynthia Johnston, editing by Will Waterman)