Qtel said it has doubled its stake in Asiacell to 60% at a price of $1.47bn as part of its bid to capitalise on rising demand for mobile broadband in the country.
The Qatari company said in an emailed statement it will initially raise the stake to 53.9% from 30%. It is also awaiting an approval from the Iraqi government and telecoms regulator, the statement added.
“The Iraqi market is about to enter a period of rapid broadband and data growth,” Qtel Chairman Sheikh Abdullah Al-Thani said in the statement.
“This acquisition is in line with our long-term strategy…through which we seek to increase our ownership in companies with significant potential.”
Inside sources in Asiacell told Reuters in January the Qatari operator was planning to buy private equity firm MerchantBridge’s 19% holding in Iraq’s second biggest mobile carrier.
MerchantBridge provided about a fifth of Qtel’s revenue during the first quarter this year.
Mobile operators in Iraq are yet to launch 3G services. The country’s fixed line broadband infrastructure is also in its infancy.
According to rival Zain’s 2011 annual report, Asiacell enjoys a 38% share of Iraq’s mobile phone subscribers. Kuwaiti operator Zain’s Iraqi unit is the market leader with 53% of subscribers, while France Telecom affiliate Korek has a share of just under 9%.
Baghdad awarded the three operators 15-year mobile licences in 2007, which required them to launch initial public offerings of 25% of their shares by the end of August 2011. All three companies say they cannot do so yet citing weaknesses in the Iraqi bourse.
“We continue to work hard on preparing for Asiacell’s landmark IPO planned for later this year,” Sheikh Abdullah, Qtel chairman, added.
The Qatari company said it will finance the acquisition from existing funds. Qtel owns majority stakes in Oman’s Nawras and Kuwait’s Wataniya.