UPDATE 1-Iraq fines Zain, others, for poor cellphone service

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BAGHDAD May 27 (Reuters) - Iraq has decided to fine Kuwait's Mobile Telecommunications Co. (Zain) (ZAIN.KW) $18.6 million for poor cellphone service, the government spokesman said on Wednesday.

Iraq's cabinet also agreed to fine two smaller cellphone companies, Korek and Asiacell, a little over $1 million each for failing to meet minimum standards of service, the spokesman, Ali al-Dabbagh, said in a statement.

"Monetary fines have been imposed on the firms for continuing bad service," he said.

Mobile phone ownership has boomed in Iraq since the U.S.-led invasion in 2003 toppled Saddam Hussein. Handset ownership was prohibited under Saddam, but now there are millions of subscribers, and many Iraqis own two or more phones.

However, coverage by the three mobile networks has deteriorated sharply over the last few months.

Each firm agreed to pay $1.25 billion for a license to operate in Iraq.

Zain had previously been fined $9 million, Finance Minister Bayan Jabor told Reuters in April. (Reporting by Michael Christie and Mohammed Abbas; Editing by Gary Hill)