KUWAIT CITY (AFP) — Saudi Telecom (STC), the largest Arab telecom firm, has won a 26-percent stake in Kuwait's third mobile company, expected to start operating next year, the Kuwait Investment Authority said on Tuesday.
STC made the highest bid of 248.7 million Kuwaiti dinars (907.6 million dollars) in a tender for the stake, said the authority which manages the investments of the oil-rich Gulf state.
The deal still has to be approved by the Kuwaiti government.
A law to establish the new mobile company set aside 24 percent for state institutions, 50 percent to be sold to citizens in an Initial Public Offering (IPO) planned for February, and the rest to go to a core investor.
The second highest bid for the stake came from a consortium led by the emirate's largest Islamic bank, Kuwait Finance House, which offered 195.1 million dinars.
STC president Saud al-Daweesh said the new company will start operations six months after its formal establishment in the first quarter of next year and will bring to Kuwait a package of new services based on latest technology.
Daweesh said STC was confident that the new company, which has a capital of 50 million dinars, will clinch 30 percent of Kuwait's market share in 10 years.
Kuwait has two mobile operators -- Zain, established in 1983, and National Mobile Telecommunications Co (Wataniya), which started operations in 1999. Together they have 2.5 million clients in a country with 3.2 million people.
STC, in which the state has a 70-percent stake, earlier this year acquired a strategic 25-percent stake in Malaysia's Maxis Communications in a deal worth 3.05 billion dollars.
Daweesh said that STC, which has a market value of 42 billion dollars, is eyeing to expand through acquisitions in North Africa, the Middle East and Southeast Asia.
The company currently provides services to 20 million mobile subscribers in the oil-rich kingdom, he said. It also has more than five million land lines.
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