Cellphone network operator Vodafone Qatar said on Wednesday it is taking legal action against Qatar's telecoms regulator, after it allowed Virgin Mobile's entry, saying it represents a third service provider.

The firm, a unit of Vodafone, said in a statement it saw Virgin Mobile's entry as a violation of the conditions to its licence, which cost shareholders 7.7 billion Qatari riyals, and the telecoms law in Qatar.

Earlier in May, Virgin Group signed a partnership with Qatar Telecom (Qtel) to launch Virgin Mobile Qatar in a brand licensing agreement to offer a prepaid mobile phone service.

"We are taking legal action for the damages this has caused our shareholders," said Chairman Sheikh Abdulrahman Bin Saud Al-Thani in a statement. "We are simply protecting their interests; 82,000 of which are individual Qataris that paid 40 percent of the second Mobile Licence fee."    

Vodafone Qatar said the telecommunications regulator -- or the Supreme Council of Information and Communication Technology (ictQATAR) -- permitted Virgin Mobile to enter the market "without being licensed".

Vodafone won the bid for Qatar's second mobile telephone licence for $2.12 billion in 2007, to break the monopoly of Qatar Telecom (Qtel).

Vodafone Qatar reported a net loss of 673.4 million riyals ($185.1 million) in its 2009-10 fiscal year, but said its revenue was 26 percent ahead of plan.

The firm, which listed on the Qatari bourse in July 2009, posted a revenue of 361.5 million riyals for the year to March 31 as its customer base surged to almost 465,000.
 - Reuters