Mobile operators are looking at expanding in Kuwait after the Gulf state announced plans for an auction of a third mobile phone licence. The Kuwait Investment Authority has invited foreign telecoms operators to register for the licence before an auction in the autumn.

The sale comes amid a scramble for Middle East telecoms assets, with operators offering billions of dollars to gain a foothold in areas with low mobile penetration and low competition.

MTC, the Kuwaiti mobile group, recently bid more than $6 billion (£2.9 billion) for a licence to operate in Saudi Arabia. This was more than $1.5 billion above the closest rival offer.

Vodafone is among companies that have prequalified for another forthcoming mobile licence auction in Qatar. The auction will break the stranglehold of the state-controlled Qtel – the last mobile phone monopoly in the Arab world. AT&T, the American group, has also qualified for that auction.

Some Western players have been deterred from entering such auctions because of the presence of high-spending players from oil-rich economies.

Kuwait, which has a population of 3.21 million, has a mobile penetration rate of just 79 per cent, compared with more than 100 per cent in Western markets such as Britain. The Kuwaiti Government is offering a 26 per cent stake in a third mobile operator. Fifty per cent will be offered to investors through an offering on the Kuwait Stock Exchange. The Government will retain the remaining 24 per cent.

Companies have until July 31 to register for the sale. A committee will then prequalify companies for a second round. Participants will be required to give a minimum bid for the stake. The winner will be announced in October. Both local and foreign operators have been invited to take part in the auction of the third operator but MTC and Wataniya Telecom, of Kuwait, are banned.

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