Dubai/London: Vodafone Group Plc, the world’s biggest mobile-phone company, and its local partner will pay 7.72 billion riyals ($2.1 billion or about Rs9,009 crore) for Qatar’s second wireless licence as Vodafone expands in emerging markets.
Vodafone and the Qatar Foundation will start the service in the first quarter of 2009 and must sell a 40% stake in the venture to the Qatari public by December, the country’s Supreme Council of Information and Communication Technology said in a statement on its website on Tuesday. Mark Pursey, a Vodafone spokesman, said the company’s contribution will be £200 million (Rs1,694 crore).
Vodafone, based in Newbury, England, has expanded in emerging markets in the past two years with purchases in Turkey and India to make up for slower growth in Europe. In Qatar, owner of the world’s largest natural gas field, the group will compete with former monopoly Qatar Telecom QSC in a country of about 900,000 people and a per capita gross domestic product of $75,900, more than double that of the European Union. Qatar is the last Gulf Arab state to break the monopoly of its state-controlled phone company.
The money it is paying for the licence “is fair value by Gulf standards to compete against the region’s last monopoly,” Andrawes Snobar, an analyst at Arab Advisors Group in Jordan, said in a phone interview. “Although Qatar’s penetration rate is already above 100%, they should be able to win share from Qatar Telecom.”
Vodafone rose 1.6% to 163.1 pence as of 11:06 am in London. It had lost 15% this year before Wednesday.
After the initial public offering, Vodafone and the Qatar Foundation will own 45 % of their venture, the regulator said. Qatar and local institutions will own 15 %.
Vodafone CEO Arun Sarin on Tuesday said he will step down in July after reporting a record £6.66 billion annual profit. Bloomberg