Vodafone nears Mid-East roaming deal with Zain -source

Vodafone is close to signing an agreement with Kuwait-based telecoms operator Zain to gain access to its Middle East networks, a person familiar with the situation told Reuters on Friday.

The deal would cover several countries in the region including Saudi Arabia, Iraq and Bahrain, allowing Vodafone to offer its customers from other countries lower roaming fees when travelling in the region.

Vodafone, which has recently completed a scaling back of its portfolio after years of rapid expansion, is seeking new agreements with local operators to spread its coverage while avoiding expensive buyouts or heavy investments.

The world's biggest telecoms operator by sales is exploiting its presence in more than 30 countries worldwide to offer cheaper roaming deals to its customers than rivals can offer, encouraging its customers to use their phones while abroad.

Zain has mobile network operating licences in Kuwait, Saudi Arabia, Bahrain, Lebanon, Sudan, Iraq and Jordan, while Vodafone's presence in the region is limited to Qatar, Egypt and Libya.

The deal would also allow the two carriers to share the costs of buying handsets.

A Vodafone spokesman declined to comment, while Zain did not immediately respond to a request for comment.