It had been planning to launch its mobile service at the start of the year using an existing telecom firm's network, making it a virtual network operator.

It is the latest in a series of delays for the sector, with three other services also still to launch.

The delay comes because the company has been concentrating on a deal for Saudi Telecom to take a SR9.8bn ($2.6bn), 35 per cent stake in Oger Telecom. “Most of the focus has been on doing the Saudi Telecom deal,” says a source at Oger Telecom. “I think that talk of a virtual network operator was misplaced.”

Jordan, Oman and Saudi Arabia had been seen as the most likely markets for the venture.

Telecoms regulators in Jordan and Oman brought in regulations allowing virtual network operators late last year. Saudi Arabia has also been studying a proposal to allow virtual operators and Bahrain is expected to make a decision on whether to allow them later this month.

US analyst Pyramid Research estimates that virtual operators will account for 10 per cent of mobile subscriptions in Oman by 2012 and 7 per cent in Jordan.

Three other companies that wanted to set up as virtual operators have yet to do so.

Two UAE retailers, Axiom Telecom and i2, had announced plans to launch by the beginning of this year. A third, Friendi Mobile, was set up in the UAE.