Kuwait's No.1 telecom operator Zain on Sunday said its Iraqi unit would complete an initial public offering by the end of 2013, signally a further delay in the sale process.

Zain's 2012 earnings release stated that Zain Iraq would likely launch an IPO in the first half of 2013, but the company's chairman now appears to have extended that target date.

"We are now taking the legal procedures and we think by the end of the year we will finish the public offering," Asaad Ahmed al-Banwan told shareholders at the company's annual meeting on Sunday.

Zain Iraq along with rival mobile operators Asiacell , an Ooredoo (Qatar Telecom) subsidiary, and France Telecom affiliate Korek all missed an August 2011 deadline to float a quarter of their shares and list on the Iraq Stock Exchange (ISX).

Asiacell is the only one of this trio to now have done so. It debuted on the ISX in February following a fully-subscribed $1.27 billion share sale that was Iraq's largest ever flotation.

Yet much of this demand came from Ooredoo, which increased its stake to 64 percent from 53.9 percent as part of the offering.

That Ooredoo stepped in to meet a shortfall in demand from retail and institutional investors has increased doubts that Iraq's other operators will be able to sell their full allotment of shares, especially as Asiacell had first mover advantage in terms of attracting local liquidity.

Asiacell now accounts for more than half of the ISX's combined market value of about $9.63 billion and its listing also boosted daily turnover to $7.1 million in February from $4.6 million a month earlier, according to data from the Federation of Euro-Asian Stock Exchanges.

Asiacell shares surged in their first few days of trading, but have now fallen back to their IPO price of 22 dinars.

Zain appears likely to be the sole seller in Zain Iraq's IPO, which could cut the Kuwaiti firm's holding to 51 per cent from 76 per cent, according to company statements in March.-Reuters