These are interesting times in the Middle East telecommunications business. The big global players seem to have woken up at last to the fact that the region has an appetite for mobile communications – an opinion that would have been obvious to anybody living in mobile-obsessed Dubai, or any of the other big cities of the Gulf.

That seems to be the explanation for Vodafone’s decision to float a stake of around 20 per cent of its Qatari subsidiary later this year.

So far, the telecoms industry in the Gulf has been dominated by the big home-grown players like etisalat (who was one of the bidders for the Qatari licence) and Saudi Telecom.

Vodafone broke into the market last year when it won the very competitive auction to buy a controlling stake of 51 per cent in the Qatar operator, with the balance held by the government.
 
Now the London telecoms giant, the biggest operator in the world by sales, is cashing in quick on that investment. Qatar has a mobile penetration rate of more than 100 per cent, meaning that every one of the country’s 1.4 million mobile subscribers has at least one phone.
 
You can expect a high level of retail investment interest in this IPO, which will probably be led by the investment banking arm of HSBC.
There was a huge level of public subscription last year when Zain, the third largest telecoms business in Saudi Arabia, floated half its shares in Riyadh, and the stock soared to twice its listing price on the opening day.

The Qatar IPO could also set a trend for the region. There was big international interest last year when Lebanon attempted to auction a mobile network (the sale was pulled because of the political instability in the country last summer), and other global players like Verizon (another underbidder for the Qatar licence) are also known to be keen to establish bases in the fast-growing region.

The IPO will also be a test of the Doha Securities Market, the country’s principle stock exchange, which has ambitious plans to become a leading regional financial centre.

Qatar has close links with the London Stock Exchange, which it is determined to bring to the level of a full-scale alliance, and it would seem natural to tap London’s vast knowledge of IPO techniques in such a major flotation. The issue could be the trigger for Qatari stock market lift-off.