The owners of Zain Iraq, the country's biggest mobile phone operator by subscribers, aim to sell 25 per cent of the company's shares after it joins Baghdad's bourse, parent firm Zain said on Tuesday.

Iraq's three mobile firms were required to float a quarter of their shares and join the Iraq Stock Exchange (ISX) by August 2011 as part of their 15-year licences awarded in 2007.

So far only Ooredoo unit Asiacell has floated, joining the ISX in February 2013. Daily fines for not doing so are being levied against the other operators: Zain Iraq and Korek, the smallest of the three.

Alkhatem - a local joint-stock company formed to hold 100 per cent of Zain Iraq's shares - on April 28 received regulatory approval to list on the ISX and must do so within two months of that date, a Zain spokesman said in an emailed response to questions from Reuters.

A quarter of Alkhatem's shares "will be offered for sale soon after finishing the listing process", the spokesman said.

"We are committed to continue offering 25 per cent of the shares until totally sold."

Zain owns 76 per cent of Alkhatem, according to the Kuwaiti firm's annual report.

"Initially, the main seller will be from Zain Group, at the same time 100 per cent of the company will be listed, allowing others to sell too," the spokesman said.

The share sale, which differs from the book-building process Asiacell used in 2013, is going ahead despite vast swathes of the country falling under the control of Islamic State, which this week seized Ramadi, the capital of Anbar province and 110 km northwest of Baghdad.

"Even though the country is currently facing many challenges, we still believe Iraq has huge potential and once the current situation is recovered, we will start seeing significant growth in the sector and uplift to the economy," a Zain spokesman said.

Zain Iraq made a first-quarter net profit of $34 million on revenue of $304 million, down 15 and 4 per cent respectively from the year-earlier period.

The company's performance "was severely hampered by the escalation of political and social instability," parent firm Zain's earnings statement said this month, adding the unit had suffered "frequent temporary network shutdowns and associated higher network operational costs", plus intense competition and currency fluctuations.-Reuters