Kuwait cabinet OKs third mobile operator

The Kuwaiti cabinet decided to establish a third mobile phone operator as the opposition-dominated parliament prepared to debate draft legislation calling for just such a move.

The government, which had previously resisted pressure by lawmakers to set up the company, insists that establishing companies is the sole authority of the executive power and not the legislature.

An official statement issued by the cabinet said 60 percent of the proposed firm will be sold to the public, 24 percent to state-owned authorities and the remaining 16 percent to a core local or international investor.

Kuwait has two mobile operators, Mobile Telecommunications Co. (MTC), established in 1983, and National Mobile Telecommunications Co. (Wataniya) which started operations in 1999.

Opposition MPs, however, insist that the establishment of a second operator had failed to cut prices and improve services.

Last week, parliament's financial and economic affairs committee approved a bill calling on the government to set up a new firm, despite government insistence that this should be done through an executive order, not a law.

The committee's bill calls for selling 66 percent of the shares to the public, 24 percent to state-owned institutions and the remaining 10 percent to a core private investor.

Parliament is expected to debate the bill either Monday or Tuesday. It had passed a similar law in April, but the government rejected it.

Wataniya was established when parliament passed a law in 1996, despite initial government opposition.

The two local mobile firms have about 2.5 million clients in a country of three million people, two-thirds of whom are foreigners, giving Kuwait one of the highest cellphone penetration rates in the world.

The larger MTC also operates in 20 foreign countries, while Wataniya operates in northern
Iraq, Tunisia and Algeria.

MTC and Wataniya are both listed on the Kuwait Stock Exchange and they have a combined capitalization of close to 20 billion dollars.