Since negotiations with Abu Dhabi’s Etisalat broke down earlier this year, two companies have held acquisition talks with Iraq’s mobile operator Korek Telecom.

One remains an anonymous, listed, foreign company. The other is France Telecom’s Orange, which has offered $1.6bn for the minority stake and shared management on offer.

Korek is in demand mainly because it is based in Iraq. There is great potential for telecoms growth in the country even with the security concerns and the frequency jamming.

Mobile phone penetration is below 80 per cent which leaves a 20 per cent market share ready for the taking. While a tender for Syria’s third mobile licence only attracted six bids, the much-delayed fourth mobile licence in Iraq has attracted interest from more than 10 companies.

It is because of this interest that Korek has the confidence to offer a minority stake for such a high price. The mobile operator is the smallest of the three national operators with only three million subscribers. It has lagged behind Asiacell and Zain, which have both undergone successful expansion policies that have seen subscriber numbers reach eight million and twelve million respectively.

Korek has until recently refrained from heavy investment in the hope that an established operator would acquire it and expand its network. The company has already invested $900m in its network, but it lacks the international backing and consolidation of services that Asiacell, majority-owned by Qatar Telecom and Zain, soon to be acquired by Etisalat, enjoy.

Korek will agree to one of the two offers: It will have to in order to survive the increasing competition in the market.