QATAR’S STRONG ECONOMIC PROSPECTS WILL SPUR GROWTH IN DOMESTIC REVENUES
Qatar’s economy is expected to grow by 11.5% in 2009, one of the highest levels of GDP growth in the GCC region.

CONTINUING TO BRANCH OUT OVERSEAS…
Qatar Telecom has gone from a one-country player to a multi-country player in just two years. In 2007, the company started expanding its operations, and now has business interests in 21 countries. It is aiming to reach its vision of becoming one of the top 20 operators by 2020.

…SHOULD REDUCE THE IMPACT OF DOMESTIC COMPETITION
Qtel’s timely foreign expansion has prepared it for the challenge posed by Vodafone Qatar and lessened the impact of the end of its monopoly on its profitability.

FINANCIAL PERFORMANCE REPORTED IN 9M09 SHOWS IMPRESSIVE GROWTH
Total revenues reached QAR 17,485 million in the first nine months of 2009 compared to QAR 14,319 million last year.

WE INITIATE COVERAGE WITH A BUY RECOMMENDATION AND A TARGET PRICE OF QAR 206.53
Qtel is currently trading at an attractive PE of 7.84, below the regional weighted-average PE of 10.53. It offers one of the highest dividend yields in the region at 6.7%. Furthermore, its subsidiaries in Algeria, Iraq, and Indonesia have large populations and mobile penetration rates below 75%. We issue a BUY recommendation with a target price of QAR 206.53, implying a 38% upside potential.