Asia-Cell pushes ahead with network build-up

05 March 2004
Asia-Cell, the consortium in charge of rolling out a GSM network in Iraq's northern region, is pressing ahead with the expansion of its coverage, adding new subscribers and introducing roaming services, according to Ahmad Haleem, chief financial officer of Kuwait's Wataniya Telecom, which holds a 40 per cent stake in the company. The consortium won the two-year GSM licence in October (MEED 10:10:03).

'We have already connected three cities and will cover all six northern cities by June,' Haleem told MEED's Iraq: Focusing on the Future conference in Dubai on 3 March. 'By the end of the year we expect our subscriber numbers to reach 350,000 from the existing 125,000.'

Haleem said that Asia-Cell has also signed 38 roaming agreements with international mobile phone carriers in the GCC and Europe. Under the roaming deals, which will come into force in March, international users will be able to operate their phones in the north of Iraq, while Asia-Cell subscribers will be able to roam into networks outside the country.

'Some technical testing is now being done before roaming is turned on,' Haleem said. Roaming agreements are also being discussed between Asia-Cell and the GSM operators in the central and southern regions - a consortium led by Cairo-based Orascom Telecomand Atheer Telecom Iraq, which comprises Mobile Telecommunications Company (MTC)of Kuwait, the local Dijla Telecommunications Corporationand Kuwait-based Kharafi Group. According to Haleem, an agreement with Orascom is imminent.

Since starting operations within 22 days of the contract award last year, Asia-Cell has invested $76 million in the network build-up, with another $40 million to be invested until the end of 2005, when the licence expires. Haleem said Asia-Cell will also incorporate general packet-switched radio services (GPRS), also known as 2.5G, on the GSM network.

So far, users subscribe on a pre-paid basis to Asia-Cell's services, but Haleem said that pay-as-you-go services will be offered to selected customers before the end of March.

While the consortium is unlikely to recoup all its investment cost by the end of the two-year licence period, Haleem said that a strong performance should prolong Asia-Cell's operations beyond the licence expiry date. 'We will not get the entire investment back in two years but we knew that,' Haleem said. 'Our decision [to go into Iraq] was based on future expectations. Our concept is to roll out and establish facts as it will then be easier to compete [in the future].'

In addition to Wataniya, the Asia-Cell consortium comprises the local Asia-Cell Telecom(51 per cent) and Bahrain-based United Gulf Bank(9 per cent).

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