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New shareholding to positively impact future earnings.

Zain Group, the leading mobile telecom company in 22 countries across the Middle East and Africa, announced that it has increased its ownership stake in Zain Iraq from 30% to 62% through exercising a pre-agreed call option between Zain and the owners of Athir National (Bahrain), which is one of the 3 founders of Atheer Telecom Iraq Ltd. (Zain Iraq) for a total consideration of US$ 34.477 million. Zain Iraq is the leading mobile provider in the country with over 8.5 million active customers.

On acquiring this stake from a group of private Iraqi investors, Dr Saad Al Barrak, CEO of Zain Group said, "We have taken this step due to our enduring faith and trust in the future of Iraq and the enormous potential of its telecommunications industry. We are confident this increased shareholding will positively impact Zain Group's future financial results in many facets, to the delight of our many stakeholders."

Zain has been providing mobile telephony in Iraq since December 2003 (previously under the name of mtc-atheer). In August 2007, the company acquired a 15-year nationwide licence for US$ 1.25 billion, shortly thereafter followed by the acquisition of Iraqna for US$ 1.2 billion on December 31, 2007. On January 5, 2008 Zain Group merged Atheer with Iraqna under the new brand name Zain.

"An essential part of Zain's profitable expansion strategy in being a top-ten global mobile operator by 2011 is to have either majority ownership or management control. This deal in turning an affiliate company to a fully fledged subsidiary company seals both requirements and was achieved on the back of our recent US$ 4.5 billion capital increase," added Dr Al Barrak.

Zain Iraq has recently invested heavily in finalising the integration of both Atheer and Iraqna's networks, at the same time upgrading the network and expanding mobile services to the northern parts of Iraq. The country is witnessing significant growth rates in mobile users over the last few years with penetration rates now reaching 50%, still significantly lower than neighbouring Gulf countries where rates have exceeded 100%. 

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About Zain

Zain is a leading emerging markets player in the field of telecommunications aiming to become one of the top ten mobile operators in the world by 2011. Zain was established in 1983 in Kuwait as the region's first mobile operator. Since 2003, it has grown significantly becoming the 4th largest mobile network in the world in terms of geographic presence with a footprint in 22 countries spread across the Middle East and Africa providing mobile voice and data services to 56.3 million active customers (as at 30 September 2008).

Zain operates in the following countries: Bahrain, Burkina Faso, Chad, the Republic of the Congo, the Democratic Republic of the Congo, Gabon, Iraq, Jordan, Kenya, Kuwait, Malawi, Madagascar, Niger, Nigeria, Saudi Arabia, Sierra Leone, Sudan, Tanzania, Uganda and Zambia. In Lebanon, the company manages the network on behalf of the government operating as mtc-touch. The company's mobile operations in Ghana will begin by the end of 2008.

The Zain brand is wholly owned by Mobile Telecommunications Company KSC, which is listed on the Kuwait Stock Exchange (Stock ticker: ZAIN). The company had a market capitalization of over US$ 23.4 billion on 30 September, 2008.

For more, please visit www.zain.com

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