Qtel reported to view Zain Saudi Arabia as possible target

Qatar Telecom (Qtel) is reported to be a potential bidder to buy Zain’s Saudi Arabian subsidiary if the UAE’s Etisalat succeeds in a bid to take a majority stake in Zain’s parent company, Zain Group. Etisalat – through its affiliate Mobily – already has an existing network in Saudi Arabia, and it is presumed that the government would require Etisalat to sell one of its operations in the kingdom.

Zain was awarded the third mobile licence Saudi Arabia in 2007, for a licence fee amounting to US$6.1 billion. In February 2008 the company completed its IPO that saw 8.5 million subscribers request to participate in the 700 million shares (50 per cent of the company’s capital) on offer, raising US$1.87 billion.

Zain Saudi Arabia counted more than seven million subscribers as of end-June 2010, and is led by Saad Al Barrak, the former managing director of Zain Group. It was his vision that established the parent company, and it would not be without irony if he was the one left to preside over the take over of the Saudi unit of the cellco to Qtel.