Qatar Telecom (Qtel) has reached agreements to double its stake in Iraq's No 2 operator Asiacell to 60 percent for $1.47 billion as it seeks to exploit rising demand for broadband.

Qtel will initially raise its stake to 53.9 percent from 30 percent, with a further increase pending Iraqi government and regulatory approval, the company said in an emailed statement.

Qtel declined to identify the sellers of the stake, but in January sources told Reuters the operator was planning to buy private equity firm MerchantBridge's 19 percent holding in Asiacell, a company that provided about a fifth of Qtel's revenue in the first quarter.

'The Iraqi market is about to enter a period of rapid broadband and data growth,' Qtel chairman Sheikh Abdullah Al-Thani said in the statement.

'This acquisition is in line with our long-term strategy...through which we seek to increase our ownership in companies with significant potential.'     

Iraq's mobile operators have yet to launch 3G services, while fixed line broadband infrastructure is in its infancy.

Asiacell has a 38 percent share of Iraq's mobile subscribers, according to rival Zain's 2011 annual report. Zain's Iraqi unit is the market leader with 53 percent of subscribers, while France Telecom affiliate Korek has 9 percent.

The three operators were awarded 15-year mobile licences in 2007. These licences required them to launch initial public offerings to sell 25 percent of their shares by the end of August 2011, but all three have yet to do so, saying the fledgling Iraqi bourse is ill-prepared. 

'We continue to work hard on preparing for Asiacell's landmark IPO planned for later this year,' Sheikh Abdullah added.

Qtel will finance the acquisition from existing funds. In May, sources told Reuters. The operator had asked banks for proposals about a $1 billion commercial paper programme. 

Qtel owns majority stakes in Oman's Nawras and Kuwait's Wataniya. - Reuters