Zain Iraq and rivals Asiacell and Korek are required to list as part of their $1.25 billion operating licenses but all three missed the initial deadline for August 2011 and have said they are working toward flotation.
“It’s hard to say (if we will list this year). It all depends. We’re trying to move from a limited company to a joint stock company... once we get that, everything should be okay,” Chief Executive Emad Makiya said.
“We’re still working with the company registrar, we’re working with the Iraq Stock Exchange (ISX). We’re pushing really hard.”
The three operators must first convert to shareholder-owned companies and then obtain approval from the ISX board and Iraq’s securities commission.
So far, only Asiacell, a unit of Qatar Telecommunications has transferred into a shareholders’ company, according to the CEO of the Iraq Stock Exchange.
Korek has said the firm is being held up by administrative problems related to tensions between Iraq’s central government and the government in the autonomous northern Kurdish area where Korek is registered.
Iraq did not have a mobile phone market under Saddam Hussein and the sector has boomed since his fall from power in 2003, offering double-digit subscriber growth. It is the fastest growing industry in the war-battered country after oil.
Makiya said he expected the number of subscribers to rise to 13 million by the end of the year from 12.5 million.
Iraq is still dominated by state-run companies and a successful stock market listing of the three mobile operators would be seen as a triumph in efforts to create a diversified economy.
The listings could also trigger a fresh wave of foreign interest in the market, which currently is heavily weighted toward banks, accompanied by a range of industrial, insurance, hotel and agriculture firms.
Zain has appointed BNP Paribas, Citigroup and National Bank of Kuwait to run its offering.
Makiya said one of the biggest obstacles hampering the telecoms sector was access to infrastructure, particularly fiber optic cables, which are under the control of a government entity.
Makiya said earlier that Zain Iraq was working with the World Bank and Iraq’s telecoms regulator, the Communications and Media Commission (CMC), to produce a study to justify access to spectrum.
“The most important thing that we desperately need is the access to fiber... to minimise the dependency on microwave, which has been flipflopping and has not been stable,” he said.
“Whenever you have distortion, signal interference or you have bad weather, rain or dust, the whole network goes down and this is affecting us.”
Zain, which won its operating licence for Iraq in 2007, has invested $4.5 billion in the country to date, Makiya said, adding that this would reach just over $5 billion by end-2012.
