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Kuwaiti operators could soon have company

The Kuwaiti cabinet has approved in principal draft legislation that could see the establishment of the country's third mobile operator, competing with MTC and Wataniya.

Kuwait may soon have a third mobile operator, following the Kuwaiti cabinet’s approval in principal of draft legislation proposed by lawmakers. The bill was initially proposed two years ago and was debated in parliament last month in two sessions. No vote was take after the government said it needed further time for evaluation of the project.

The cabinet has now asked the Kuwait Investment Authority to conduct an economic and technical feasibility study over the next six months on a potential new operator. The Kuwait Investment Authority is the state investment arm managing around US$150 billion.

According to the Kuwait news agency quoting Mohammed Dhaifallah Al-Sharar, deputy prime minister of state for parliamentary and cabinet affairs, the government would fully finance the new operator’s equity through interest-free loans. Forty percent in the new operator will be allocated to the state’s pensioner institution, another 40% would be sold to the public, 10% for pension funds with the remaining 10% going to strategic investors.

Kuwait already has two mobile operators in MTC and Wataniya. At the end of October 2005, MTC had almost 1.4 million subscribers and Wataniya had 928,000. With a population of nearly three million, this gives Kuwait a penetration rate of over 83%, one of the highest in the region. MTC and Wataniya also operate outside of the country, MTC with 19 foreign interests across the Middle East and Africa, and Wataniya with operation in northern Iraq, Tunisia and Algeria. Both are listing on the Kuwaiti Stock Exchange and have a combined capitalisation of almost US$20 billion.

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