Vodafone Qatar CEO Grahame Maher has detailed the challenges that still lie ahead of the operator commercially launching as the country’s second operator, providing more evidence that a launch is only likely to occur in the latter part of the year.

Vodafone Qatar’s Maher said only half of the required base stations and towers are built so far, with coverage limited to the greater Doha area

Disagreements over interconnection fees with incumbent Qtel still exist, with the number of base stations rolled out by Vodafone Qatar behind schedule. Just 1,000 customers will be able to use the service during a two-month trial period, which is believed to start before the end of March, and which would meet licensing conditions that required the licensee to launch a service by the end of March.

Maher has said he is confident that outstanding issues with Qtel over interconnection fees and sharing of tower infrastructure would be resolved shortly, after the matter was referred to the telecoms regulator ictQATAR.

The two-month trial will start “sometime in March” and will be limited to within the greater Doha area; with hundreds more base stations and towers required for coverage.

“We’re half way through, we haven’t got as much coverage as we would have liked,” Maher acknowledged to local press.

The trial will involve 1,000 pre-registered customers who will be offered discounted call rates of 55 dirhams (US$0.15) per minute for national calls and 40 dirhams per SMS. However, customers must pay an initial fee of QAR70 and must own a credit card, as the Vodafone system can not handle cash payments yet.

Alcatel Lucent is responsible for the construction and integration of technologies across the country and EDS is handling the IT side of Vodafone’s network.

Additionally, Vodafone is still waiting approval from the Qatar Financial Markets Authority (QFMA) for a date for its initial public offering (IPO). A requirement of the mobile licence required the company to IPO before November 30 last year, but this was delayed due to adverse market conditions.

The IPO of Etihad Atheeb Telecommunication Co. (Atheeb), one of the three new fixed-line licensees in Saudi Arabia, has been oversubscribed by 200 per cent.

Shareholders Batelco and private Saudi investors intended to raise SR300 million (US$80 million) in the IPO which closed yesterday, through the offer of 30 per cent of the company’s capital, equating to 30 million shares at SR10 each.

Financial advisor, lead manager and underwriter for Atheeb’s IPO process, Saudi Hollandi Capital Co, stated that at the eight receiving banks in Saudi Arabia had received 60.133 million share subscriptions from more than 774,000 subscribers, as of February 1.

Following the IPO Batelco will retain a 15 per cent stake in Atheeb, with the remaining shareholding divided amongst Atheeb Group, Nahla Company and GOSI (General Organisation of Social Insurance).

Atheeb’s IPO is the kingdom’s first since August 2008, following the country’s Capital Markets Authority reportedly placed IPOs on hold until investor confidence improves. The local bourse has lost 45 per cent of its value during the past four months.

When Atheeb launching commercial services later this year it will compete with incumbent STC and the two other licencees – Optical Communications spearheaded by the US’s Verizon, and Al-Mutakamilah Company led by Hong Kong’s PCCW.

STC has approximately 4.5 million fixed-line subscribers and 1.3 million Internet users, representing penetration rates of 18.75 per cent and 5.4 per cent respectively.

Orange Jordan’s 2008 net profit grew 6.1 per cent from a year earlier to JD100.3 million (US$141.5 million), on the back of a strong performance from its Internet services business.

Orange Jordan’s mobile subscribers grew 2.6 per cent to 1.75 million as of end-2008, but faces stiff competition from market leader Zain which had 2.253 million customers at the end of September 2008

Orange Jordan provides fixed, mobile and Internet services, and while overall revenues remained flat, increasing by only 0.9 per cent to JD401.4 million for the year, the contribution from Internet services rose by 52.9 per cent to JD21.1 million.

The operator is 51 per cent owned by France Telecom and is the sole fixed-line operator, yet faces stiff competition in the mobile realm from Zain, Umniah and iDEN operator Xpress. There are also several smaller Internet providers present in the market.

Mobile subscribers grew 2.6 per cent to 1.75 million customers, Internet subscribers rose 55.6 per cent to 102,000, while fixed subscribers increased by a mere 0.5 per cent to 663,400. In comparison, market leader Zain counted 2.253 million mobile customers as of end-September, and is yet to announce its full-year results.

Orange Jordan attributed the overall diminishing growth rate to a weakening economy, while saying the fast-growing data services unit would offset the falling revenues of its fixed business, which decreased by 4.7 per cent year-on-year.

Etisalat revealed today it will offer Apple’s iconic 3G iPhone to consumers in the UAE and Saudi Arabia later this month, making it the first of the Gulf markets in which the device is officially available.

The UAE operator did not offer further details about the agreement with Apple, except to say that the iPhone would be offered in Saudi Arabia through second mobile operator Mobily; in which Etisalat is a 26.25 per cent shareholder.

At the moment the closest markets where consumers can officially purchase the device is in Jordan through Orange, and in Egypt and Turkey through Vodafone, which has an agreement to offer the iPhones in ten of the countries where it operates. It had been anticipated that Vodafone’s imminent launch in Qatar would see the first introduction of the 3G phone in the Gulf, but Etisalat looks set to beat Vodafone to the punch.

The 8GB iPhone model currently retails in the UK with operator O2 for £350 (US$502), while the 16GB version costs £401.

Should Etisalat be able to extend the parameters of the deal to include Iran, where it was recently selected as the winner of the country’s third mobile licence, and first 3G licence, it would potentially create an attractive proposition to accompany the operator’s market entry. Etisalat has an exclusivity period to provide 3G services ahead of the mobile incumbents TCI and MTN Irancell.

Etisalat today reported that during the fourth quarter of 2008 it recorded a net profit of AED 2.1 billion (US$572 million), before year-end adjustments, reflecting an increase of 18 per cent as compared to the same period in 2007. Etisalat also reported total annual net profit of AED8.665 billion, up 19 per cent year on year, while net revenues for the year amounted to AED 26.119 billion, up 22 per cent.

Omran believes new licences such as the one awarded in India will support the development of Etisalat into the future

Net revenues in Q408 amounted to AED 7.1 billion, up from AED 6 billion for the same quarter a year earlier, reflecting an increase of 18 per cent.

“Acquiring new licences in Iran and India provides us with significant growth opportunities, and will support the development of our company for many years to come,” commented Etisalat chairman, Mohammad Omran.

At the end of 2008, the number of Etisalat mobile subscribers in the UAE grew 14 per cent year-on-year to 7.3 million, fixed line subscribers grew three per cent to 1.36 million and Internet subscribers grew 31 per cent to 1.15 million.