Virgin Mobile’s newly launched operation in the emirate state of Qatar has had its wrists slapped by the regulator along with its local host and network partner, Qtel (Qatar Telecom).

The MVNO launched services in Qatar in May, having struck a partnership deal with local incumbent Qtel. But Vodafone Qatar, the only other mobile operator in the country, complained to the regulator about the way Virgin was positioning itself in the market.

The regulator, ictQatar, on Saturday issued a ruling that favoured both parties. Virgin will be allowed to continue selling its services because “customers who have purchased Virgin Mobile services have entered into contracts with QTel and not Virgin Mobile and, as such, Virgin Mobile does not require a telecommunications licence.”

However, Virgin will have to adjust its marketing, because the regulator found that the services “were represented by QTel to the public…in a manner which misled or deceived people about who was providing the services. Some people were misled into thinking that Virgin Mobile was a new telecommunications operator or service supplier in Qatar. This had the effect of distorting competition,” the regulator said.

In these situtations the only winners are the lawyers, and Vodafone is believed to be considering it’s legal options against Qtel and Virgin.

Qtel dominated the market in Qatar at the end of June with 2.198m subscribers, while Vodafone brought up the rear with 534,000 customers.

Qatar is also the country where Vodafone has a metro femtocell installation in place, serving open public areas. On Monday the carrier said it has also extended its residential femto offering to Greece – a new femto market alongside the UK and Spain.