Kuwait opened Sunday the $98.13 million initial public offering of its third mobile telephone firm with experts expecting large demand as the sector still exhibited growth potential.
The government is offering 50% of the operator, Kuwait Telecommunications Co, to citizens only. In November it sold 26% of the firm to Saudi Telecommunications Co for 248.7 million dinars ($929.7 million) in November.
Despite increasing competition among mobile telephone firms in the Gulf Arab state, which has almost a 100% penetration rate, the IPO is expected to attract high interest. “Everybody is going to subscribe. You can expect that majority of Kuwaitis who have access to cash ... are going to subscribe,” said a broker from National Bank of Kuwait.
Fouad al-Hajeri, a member of the firm’s founding committee, said he expected around 650,000 people to take part in the IPO, initially planned for February.
When it starts operations the new firm will compete with Mobile Telecommunication Co (Zain), the third-largest Arab telecoms company, and National Mobile Telecommunications Co (Wataniya), a unit of Qatar Telecommunications Co. “There will be very good demand ... There is room for potential growth in the telecoms sector in Kuwait even if penetration level is high,” Chandresh Bhatt, assistant vice president of research at Global Investment House, said.
Like other Gulf Arab oil exporters, Kuwait is attracting a growing number of guest workers as the economies boom on an about six-fold rise in oil prices since 2002. (Reuters)