Omantel stock fell more than 4 per cent after the Omani telecoms company, owned by the government, said it planned to sell a 19 per cent stake.

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Omantel stock fell by more than 4 per cent yesterday after the government-owned company said it planned to sell a 19 per cent stake.

The nation’s biggest mobile operator plans to sell the shares through “public subscription to Omani nationals individual and institutions”, the company said in a filing.

Omantel’s market capitalisation was US$3.13 billion as of Monday, making the 19 per cent stake worth about $595 million.

The government is currently the largest shareholder with a 70 per cent stake, after the operator was part-privatised in 2005. It had previously looked at offloading a 25 per cent stake in 2008, but postponed plans because of the global recession.

“My best guess is that the Omani government has taken a view that the financial markets have recovered sufficiently to revive the idea of selling a further stake in Omantel,” said Matthew Reed, the principal analyst at Informa Telecoms and Media. “It seems to be part of a wider driver to generate money to the state and raise cash.”

News of the announcement had a negative impact on Omantel’s share price, which fell by as much as 5 per cent on Tuesday before closing 4.3 per cent lower.

The Government is now in the process of appointing a consultant for the flotation.

Omantel has been struggling in recent years with competition from Qatar’s Nawras and mobile virtual network operator players in the country, but remains the dominant player with a 58 per cent share of the mobile subscriptions market in Oman.

The announcement comes as a flurry of merger and acquisition activity in the region has revived in recent months. Etisalat is currently in negotiations over a stake in Maroc Telecom, Bahrain’s Batelco acquired some of Cable & Wireless’ assets earlier this year, while Qatar’s Ooredoo won a licence in Myanmar.

“It’s not hard to see a pattern that the bigger players are trying to expand their interests. There are relatively fewer markets still that offer growth prospects, so they are looking for growth in adjacent emerging markets,” said Mr Reed.