Zain, the Kuwaiti operator formerly known as MTC (Mobile Telecommunications Company), announced on Saturday that it will buy Orascom Iraq-based subsidiary Iraqna Company for Mobile Phone Services for $1.2bn.

In August 2007, Zain’s existing Iraq-based subsidiary, MTC-Atheer, made a successful bid of $1.25bn to secure one of three 15-year nationwide licences awarded by the Iraqi Communication and Media Commission.

The Iraqna acquisition will consolidate MTC-Atheer’s position in Iraq giving rise to a combined customer base of more than seven million customers. Mobile penetration in Iraq currently stands at about 33 per cent so there is plenty of room for growth in the Middle East’s second most populous country.

Commenting on the transaction, Dr. Saad Al Barrak, managing director-deputy chairman of Zain Group, stated:  “This investment reinforces and demonstrates our commitment to the future prosperity of Iraq while complementing Zain’s aspirations of becoming a top ten global mobile operator by 2011.”

The expanded MTC-Atheer operation will have the second largest customer base in the Zain Group’s 22 operations across the Middle East and Africa now serving more than 43 million customers.

The resulting operation’s network will span over 15,000 sq km, covering all the major populated areas and this network will be further expanded to cover all of Iraq in the future. Recently MTC-Atheer extended its services to Kirkuk in the north of Iraq.

The enhanced MTC-Atheer operation in Iraq will be re-branded Zain in early 2008.