Kuwait will exclude foreign firms from an auction to sell 26 percent of a mobile phone operator set up by the government, a report said.

The government said earlier this year it was planning to open the auction to foreign operators and publicly traded Kuwaiti companies that are not in the telecoms business.

The cabinet has now decided against allowing foreign firms to compete for the stake, Al-Seyassah newspaper said, citing unnamed cabinet sources.

Abu Dhabi-based Emirates Telecommunications Corp. (Etisalat) is among the foreign operators that have said they would consider a bid in Kuwait.

Fifty percent of the new operator will be sold to the public and the rest held by the government, said the company's founders, which include the state-owned Kuwait Investment Authority.

The deadline for bids is September 7, state news agency Kuna said last month.

Kuwait has two mobile phone networks run by Mobile Telecommunications Co. and National Mobile Telecommunications Co. (Wataniya). - Reuters