Zain Group increases stake in Iraq mobile operation to 62%

The increase has been carried out through exercising a pre-agreed call option between Zain and the owners of Athir National (Bahrain), which is one of the 3 founders of Atheer Telecom Iraq Ltd. (Zain Iraq) for a total consideration of $34.477m.

Zain Iraq is the leading mobile provider in the country with over 8.5 million active customers.

On acquiring this stake from a group of private Iraqi investors, Dr Saad Al Barrak, CEO of Zain Group said,

"We have taken this step due to our enduring faith and trust in the future of Iraq and the enormous potential of its telecommunications industry. We are confident this increased shareholding will positively impact Zain Group's future financial results in many facets, to the delight of our many stakeholders."

Zain has been providing mobile telephony in Iraq since December 2003 (previously under the name of mtc-atheer).

In August 2007, the company acquired a 15-year nationwide licence for $1.25bn, shortly thereafter followed by the acquisition of Iraqna for $1.2bn on December 31, 2007.

On January 5, 2008 Zain Group merged Atheer with Iraqna under the new brand name Zain.

"An essential part of Zain's profitable expansion strategy in being a top-ten global mobile operator by 2011 is to have either majority ownership or management control. This deal in turning an affiliate company to a fully fledged subsidiary company seals both requirements and was achieved on the back of our recent $4.5bn capital increase," added Dr Al Barrak.

Zain Iraq has recently invested heavily in finalising the integration of both Atheer and Iraqna's networks, at the same time upgrading the network and expanding mobile services to the northern parts of Iraq.

The country is witnessing significant growth rates in mobile users over the last few years with penetration rates now reaching 50%, still significantly lower than neighbouring Gulf countries where rates have exceeded 100%.