November 11, 2015 / 1:52 PM / 4 years ago

UPDATE 1-Iraq to sell fourth mobile licence

* Three existing operators paid $1.25 bln for licences in 2007

* Iraq sets Nov. 20 deadline for submissions of interest

* New entrant would exacerbate conditions in already tough market (Recasts, adds details)

By Matt Smith and Stephen Kalin

DUBAI/BAGHDAD, Nov 11 (Reuters) - Iraq’s communications regulator plans to sell a fourth national mobile telecom licence, according to a posting on its website, in what would stiffen competition in a market already suffering from tumbling revenues and war-related service interruptions.

The Communications and Media Commission (CMC) has set a Nov. 20 deadline for bidders for the 15-year licence to submit their interest, the document seen on Wednesday said.

The country’s three mobile operators — Ooredoo’s Asiacell, Zain Iraq and Korek — each paid $1.25 billion for their 15-year licences in 2007 and were then charged a further $307 million for the necessary radio spectrum to launch 3G services earlier this year.

The fourth licence will be technology neutral, meaning the buyer should not have to pay additional fees as the three others did.

The trio will be required to share some of their infrastructure and facilities with the new operator to help it roll out services quickly, said the document.

Iraq’s telecom market has strong potential, with its relatively low mobile penetration rate of 95 percent compared with 180 percent in neighbouring Saudi Arabia, the document said.

But the recent performance of Asiacell, a subsidiary of Qatar’s Ooredoo, and Zain Iraq, a unit of Kuwait’s Zain, paints a far grimmer picture as tough domestic competition, higher costs, and service interruptions due to Islamic State’s territorial gains affected their operations.

Asiacell’s average revenue per user (ARPU), an important gauge of the industry, was 38.4 Qatar riyals ($10.55) in the third quarter of 2015, down by a fifth from the second quarter of 2014.

Similarly, Zain Iraq’s net income for the nine months to Sept. 30 was $102 million, down 54 percent from a year earlier.

Fourth licence holders have struggled in most markets, let alone a country ravaged by war, an Iraqi telecom source said, predicting a buyer would expect to pay much less than the other three mobile operators.

$1 = 3.6396 Qatar riyals Reporting by Stephen Kalin and Matt Smith,; editing by Louise Heavens

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