Iraq’s Information Technology & Post Company (ITPC) has signed a deal with Saudi Arabia’s STC and Turk Telekom to deploy a fibre-optic cable transit connecting Saudi Arabia to Germany through Iraq and Turkey. The transit is set to go online in early 2011. It will initially offer a capacity of about 200GB which will increase to 600GB.

The parties agreed on the deal last week in Dubai and are due to officially sign the contract before the end of December. ITPC is working in partnership with Newroz Telecom, which will lay down the cables in Iraq. This is expected to cost about $100m.

“We have a big vision to turn Iraq into a telecommunications hub, we are moving at a fast pace, but it is not fast enough,” says ITPC general director Kassim al-Hassani.

Private-sector operators have been frustrated and angered by the ITPC’s decision to prevent ownership of fibre-optic networks. The state-owned enterprise controls the country’s gateways, so is the only body with the authority to own and sell the capacity. Currently, private-sector companies build the networks then buy back the capacity for $1,100 a kilometre. In Europe prices range from $7-15/km and in neighbouring countries in the Middle East the cost is about $500/km.

“For Iraq, the cost is fair,” says Al-Hassani.

Industry sources say that if ex-communications minister Mohammed Tawfik Allawi returns to his former post, the sector will develop at a better rate. Returning Prime Minister Nouri al-Maliki has 19 days remaining to appoint his Council of Ministers.