Vodafone Qatar is under pressure as investors are pushing the operator to step up its game.
The company has yet to make a profit since entering the country's telecommunications market in 2009, breaking the Qatar Telecom (Qtel) monopoly.
At its annual meeting on Sunday, Vodafone Qatar announced it would not distribute dividends until 2013.
The Peninsula, a Qatari newspaper, quoted a shareholder present at the annual meeting as saying he was "frightened" by the company's performance.
Since its inception, Vodafone Qatar has had eight consecutive quarters of losses.
In its latest results, it said it made a loss of 27.1 million Qatari rials before tax for the year ending March 31. That was a big improvement on the 225.3m rials loss the previous year, helped by increasing revenues. These grew to 934.9m rials in the year ending March 31, up by 159 per cent compared with the previous year.
Sally Gerges, the telecoms analyst at EFG-Hermes said that as a "start-up" the company was not out of the ordinary for being at a loss. "They have to break even and start making profits and then decide whether they should distribute dividends," she said.
The company has assured investors it will improve its services. The acting chief executive John Tombleson said the operator would borrow US$100m to develop a fixed-line network.
This is expected to put it on a more even playing field with Qtel.
"They can now compete with Qtel," said Ms Gerges. "It's much better for Vodafone Qatar to be competing in all three markets," she said, referring to the internet, fixed and mobile services.
The company currently operates in internet and mobile fields only.
In a victory for the company last week, the Qatari regulator said Qtel broke the law when it partnered with Virgin Mobile to offer mobile services under the Virgin brand using the Qtel network.
The ruling came a year after Vodafone Qatar first lodged a complaint that the Virgin brand worked more as a third operator rather than a subsidiary.
Shares in Vodafone Qatar yesterday slipped 0.5 per cent to 7.8 rials on the Doha exchange.