The operator’s board has set a maximum debt level of 3.5 times earnings. However, according to credit ratings agency Standard & Poor’s, the company’s debt was 3.6 times earnings at the end of September 2008.

“Our current level of debt means that we will not add any more leverage,” says Hilal Malawi, global head of business development at Qtel.

A large number of new telecoms licences are due to be sold in the region this year, including those in Algeria, Iraq, Jordan, Morocco and Tunisia. Bahrain and Iran have both already awarded new mobile phone licences this year.

Qtel’s decision not to raise any further debt means it will need an alternative source of financing if it is to bid for the new licences on offer. Malawi says it will consider selling shares to do so.

“There is always equity,” he says. “It was not a problem for us to raise equity last year, so I do not see a problem with it in future.”

Qtel raised QR5.8bn ($1.6bn) through a rights issue on 30 June 2008, according to Dealogic, a UK data provider. Shareholders who bought the shares at the offer price of QR160 a share have lost 39 per cent on their investments since then, with Qtel’s shares trading at QR98 on 28 January.

Some 45 per cent of Qtel’s equity is floated on the Doha Securities Market. The Qatari government holds the controlling 55 per cent stake in the company.