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Q3 profits slip for Qtel

Refinancing and acquisition costs eat into Qtel's Q3 profits

Qatari Telecom (Qtel) has suffered its second consecutive quarterly profit slip in Q307 due to rising financing costs incurred through its takeover of Kuwaiti operator, Wataniya.

The Qatari incumbent operator, which will soon lose its domestic monopoly, saw profitability dip annually to QAR 4.12 ($1.13) per share in Q307 from QAR 4.36 ($1.20).

The dip in share price was largely attributed to the company having to raise a $3 billion loan for the $3.72 billion takeover of mobile operator Wataniya.

"Qtel is well positioned to face the competition and will continue to strive to meet and exceed the expectations of its stakeholders. The investments made by Qtel, in and outside Qatar, will also ensure that the growth of shareholder value continues in the long run," said Qtel chairman Sheikh Abdullah Bin Mohammed Bin Saud Al-Thani.

The group's other major acquisition during the nine months ending September 2007 included the $1.25 billion purchase of one of the three Iraqi mobile licences (the company holds a 30% stake in the AsiaCell consortium).

Profit for the overall Qtel group rose to $148.6 million compared to $117.1 million for the year ago period. The company claimed a 40% market share in the Oman mobile market with a subscriber base of 897,000 as of the September 2007.

A recent report issued by market research firm Morgan Stanley tipped Qtel as potentially one of the most lucrative opportunities for investors citing its brand equity, presence in both high-ARPU and high growth markets as the main drivers for the company's value.