Another telecoms firm pulls out of race for Iraq mobile licence

29 January 2012

Political instability proves a stumbling block to telecommunications development in Iraq

Saudi Telecoms Company (STC) is the latest telecommunications company to withdraw from pursuing Iraq’s fourth mobile licence, amid increased political instability that has delayed the process yet again.

STC’s decision follows Emirates Telecommunications Corporation’s (Etisalat) withdrawal from the process. Etisalat confirmed to MEED in October 2011 that it would not be placing a bid. France Telecom also pulled out of the race early on and instead pursued a stake in third mobile operator Korek Telecom.

“We have not heard anything and will only be interested now if we receive something concrete from [the ministry],” says Ghassan Hasbani, chief executive officer of Saudi Telecoms Company’s (STC) international operations.

Fears of renewed political instability and a general lack of guidance from the communications ministry have dissuaded many international operators from actively pursuing the licence.

The long-awaited fourth mobile licence initially attracted interest from as many as 13 telecoms companies worldwide, but now just a handful remain. Sources at the ministry have suggested that Turk Telecom and UK’s Vodafone are most likely to be awarded the licence.

Industry regulator the Communications and Media Commission (CMC) has also suffered from several personnel changes, which has brought about delays in the decision-making process.

This is another setback for the fourth licence, which has been on the ministry’s agenda for more than three years. Under the terms of the licence, the ministry will control a 25 per cent stake in the new operator, 35 per cent will be offered to the public and 40 per cent will be controlled by the licence winner. The ministry recently appointed UK-based consultancy PricewaterhouseCoopers to outline a strategy for issuing the fourth licence.

“Everything has gone back to square one,” says a source close to the ministry.


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