BARCELONA: Qatar Telecom is keen to expand via acquisitions while also growing organically in countries like Tunisia, Algeria, and Iraq where its existing mobile and fixed networks need major investment, its CEO told Reuters. Nasser Marafih, who heads the highly profitable telecom operator based in the oil-rich Gulf state, said Qtel had shifted from the break-neck pace of international expansion that saw it enter 16 countries from Indonesia to Algeria over a decade to a more measured pace. "We have started to show we can create value by running our business, not just buying up companies," said Marafih in an interview at Mobile World Congress in Barcelona. For example, Marafih said Qtel has strengthened Iraq's Asiacell, in which it owns a 30 percent stake, helping it become the war-ravaged country's number two operator. Iraq now brings in roughly one-fifth of Qtel revenues and is growing strongly, according to analysts. Marafih said Asiacell was ready to carry out a planned public listing of 25 percent of the company, which was a condition of its license, and expected to finish it this year. "We're working with the government to do this as soon as we can," he said. Marafih confirmed reports that Qtel was weighing buying out the 19 percent stake in Asiacell owned by London-based private equity partner MerchantBridge. "That is something that could be investigated. That is the general strategy. We're going through the IPO stage but that's something that could be up for discussion with the partners." Such acquisitions in fast-growing markets of the Middle East and Asia have given Qtel a compound annual growth rate of over 50 percent in the past 5 years and margins near 50 percent, figures that European and US operators could only dream of. Qtel has also expanded into countries with large young populations like Indonesia which has 238 million people and a median age of 28. At home in Qatar, the group was a monopoly until three years ago when Vodafone launched in the country, which has the second-highest per capita income in the world of more than $100,000 a year. Marafih said Qtel was well positioned to grow its business even as some of its markets matured because most consumers had not yet made the transition to data-hungry smartphones and tablets. "Smartphone penetration is still low in our region, so even though our customer growth may slow, we still can earn more revenue from users," he explained. In countries like Algeria, Iraq, and Tunisia governments have not even issued mobile licences for third generation technology that allows networks to deliver fast Internet to phones. Qtel will seek such licenses, which may be issued this year in Tunisia and Algeria, as well as work to build out fixed networks as a way to grow the businesses, Marafih said. As far as expansion into other countries, Marafih explained that Qtel would be pragmatic with acquisitions, searching for targets with critical mass and near its existing footprint. Qtel is monitoring opportunities in Libya where there are two state-owned telecom firms that might be opened up after the country's revolution. "We would be interested to look at that when the time comes," said Marafih. In Syria, Qtel had bid for a third generation mobile license last year but the auction was suspended because of the political unrest rocking the state. "Of course with what is going on there it is all on hold now," said Marafih of Syria. "But this is an interesting market for us to look at and we are waiting to see what will happen." –Additional reporting by Matt Smith
