Etisalat, Zain forerunners for Qatar licence

One of regional telco giants most likely to get Qatar's second mobile licence, analyst predicts.

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By  Michele Howe Published  October 9, 2007

Regional telco giants Etisalat and Zain will likely go head to head in the battle to secure Qatar's second mobile licence, according to a telecoms analyst.

Of the seven candidates that are pre-qualified for the mobile licence, the UAE telco operator and the Kuwait-based group formerly known as MTC are the two most likely players to get it, Delta Partners analyst Federico Membrillera predicts.

Getting the second licence in Qatar would be a coup for Etisalat, which is seeking to expand its regional footprint after the arrival of a competitor on its home territory earlier this year, he told ITP.net

"The only relevant footprint they have missing in the region is Qatar. They have big pockets. They haven't done a very relevant acquisition in the past 12 months and they know how to run regional operations," he said, referring to Etisalat's operations in Egypt.

As for Zain, the Qatar licence would be a good opportunity to balance out the rest of its activities in the region, he opined.

The recently re-branded group is active in Bahrain and Kuwait and was recently awarded a licence in Saudi, but is not in the UAE.

The stability of the Qatari market was also likely to appeal to Zain as it would help the group to offset some of its higher risk investments, Membrillera added.

Despite having a comparatively high mobile penetration rate - 120% in a population of more than 628,000 people - the Qatari market is a good bet for an investor, according to Membrillera.

"The Qatar market is quite attractive. It is a very penetrative market, but is also a very high growth environment with high Average Revenues Per User (ARPU)," he said.

It should also prove receptive to a new entrant, he added.

"There is only one operator and the consumer would like to have something different in the market so in that sense Qatar represents a good opportunity for someone getting into the market with a different value proposition," he said.

The issuing of a second mobile licence in Qatar ends the monopoly of incumbent operator Qtel on the provision of the mobile services in the country.

Qatar is the last of the six Gulf states to open the market to competition after the UAE awarded a second mobile licence last year.

The other pre-qualified candidates for the licence are ACE Consortium, Argos Consortium, AT&T, Batelco and Vodafone.

The bids from candidates are currently under technical evaluation with the announcement of the winner expected early November.

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