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Vodafone Plans Qatar IPO

Riding on the success of telecom in the Middle East, U.K.-based Vodafone Group plc (NYSE: VOD) is in the process of setting up mobile operations in Qatar and plans to spin off a stake in the new service provider by the end of the year.

Vodafone beat out consortia led by AT&T Inc. (NYSE: T), Etisalat , and Zain Group (formerly MTC) in the auction for the country's second mobile license, which was awarded last December and will give it a 51 percent stake in the new operator. (See VOD Wins Qatar License and Vodafone Eyes Emerging Acquisitions.)

Vodafone joined with the Qatar Foundation, a non-profit organization founded by Qatari ruler Sheikh Hamad bin Khalifa Al-Thani, in bidding for the license.

According to a Vodafone spokesman, the carrier will hold a minority stake in the operation after a planned IPO later this year, but will remain its largest shareholder.

The mobile operator is expected to be up and running by the end of the year, and it's common in the Middle East for governments to require a stake in a new operator to be listed publicly as part of the licensing conditions.

Vodafone's spokesman says "it's too early in the process to give any indication" as to the value of its Qatari offering, but markets in the Middle East are providing eye-watering valuations for mobile assets as rapid subscriber growth and liberalization provide attractive investment opportunities. (See Who Does What: Middle East Carriers.)

For example, Zain was awarded Saudi Arabia's third mobile license in July last year for $6.1 billion and last month launched an IPO for a 45 percent stake in its new operator, set to launch in June. The offering was valued at 6.3 billion Saudi riyals ($1.68 billion) and was heavily oversubscribed, attracting more than 17.8 billion riyals ($4.74 billion). The stock more than doubled in value on its first day of trading, March 22. Zain is also planning an IPO in Bahrain to meet licensing conditions.

— Nicole Willing, Reporter, Light Reading

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