As ictQatar looks to licence, Qtel looks to expand

No fewer than 12 bidders have now stepped forward and fulfilled the necessary criteria to apply for the licence. They include some of the industry's biggest hitters from regional players like the UAE's Etisalat and Kuwait's MTC to international providers like the UK's Vodafone, AT&T from the US and India's Reliance.

No pause for breath

ictQatar commenced the formal application process in the first half of July and all the pre-qualified firms must hand in their applications by September 2. The Qatari regulator will then begin a detailed evaluation of the applications from a technical and commercial perspective. Once this is complete, those firms that meet all the necessary requirements will then move forward to the auction stage.

The pre-qualified candidate that not only fits the required profile but also, of course, makes the highest bid in the auction will be recommended to receive the coveted licence. If all goes to plan, one of the 12 applicants will have the licence in their possession sometime in October.

This is a tight schedule and it isn't made any easier by the fact ictQatar has also set about the application procedure for Qatar's second fixed line licence. Parties interested in snaring this licence have until September 9 to express an initial interest.

ictQatar has set out clear guidelines for potential applicants and all those seeking the mobile licence are free to apply for the fixed line version too just so long as they already operate a similar service and have a customer base of at least 150,000.

Keen to buy

The fixed line application process might be in its early stages but already one operator, the UAE's Etisalat, has thrown down the gauntlet and expressed its intention to bid. It is thought the firm will make a more determined attempt for the licence if it is successful in its quest for the mobile option.

There is every likelihood that by the time ictQatar announces the pre-qualified bidders for the fixed line licence in the autumn, the list will contain just as impressive an array of telco operators as the mobile version before it.

A large number of regional operators are keen to expand internationally as they meet stiffer competition at home in increasingly liberalised environments. Indeed, Qatar Telecom (Qtel) provides a perfect example of this.

Late last year, and reported in this column, Qtel's former COO David Murray said the firm was unfazed by the prospect of rival operators moving into Qatar and stated it was focused on an overseas acquisition drive. Qtel certainly meant business and within a few months the company had spent $600m on a 25 per cent stake in Singapore Technologies Telemedia's mobile outfit, Asia Mobile Holdings, and had followed this up by acquiring a majority 51 per cent holding in Kuwait's National Mobile Telecommunications Company, Wataniya, for a cool $3.7bn.

No sign of a let-up

Qtel also made a minor investment in a telco operator in Pakistan earlier this year but it has frustratingly missed out on major deals in India, where it was part of a consortium involving the Hinduja Group for a 61 per cent stake in Hutch-Essar, and in Saudi Arabia where it had attempted to secure a fixed licence.

The firm's international plans received a major boost last week, however, when it was part of the Asiacell consortium which paid more than $1.2bn to land one of three 15 year mobile licences handed out by Iraq. Qtel holds a 30 per cent stake in Asiacell Communications, the consortium's operating company. With its various subsidiaries and affiliates, the Qatari firm now has a presence in 15 countries.

But Qatar Telecom is unlikely to rein in its expansion push just yet, especially as its domestic competition will shortly appear on the horizon. The company's CEO Dr Nasser Marafih has openly stated that Qtel will look to make further acquisitions in the Middle East and North Africa.

The firm has been bolstered by first half of the year revenue of $1.1bn, a 97.4 per cent increase on the previous year's figures, and the granting of a $2bn revolving credit facility which it will use to help pay for its previous acquisitions and fund additional ventures in the future.

With a report by Wireless Intelligence suggesting mobile connections in the Middle East will cross the 150 million mark this year and with the sector expanding by 25 per cent, making it the second fastest growing region on the planet, Qtel has every reason to kick on in its quest for a strong portfolio, before its own market becomes squeezed by avid competition.

See also:
ictQatar quickly changing the face of Qatar's telco sector

Qtel remains bullish as competition looms