Korek to invest $400m in national mobile network in Iraq

23 May 2008
Move comes despite ongoing talks with UAE’s Etisalat over joint venture.

Korek Telecom, one of Iraq’s three mobile phone operators, will spend up to $400m over the next year on building a nationwide mobile network.

The decision comes despite the fact the company has still not finalised an expected joint venture with UAE giant Etisalat to support its growth plans.

“We have already started planning for the nationwide network,” says Hamid Akrawi, chief operating officer of Korek. “It will take maybe six months to one year and it will cost us $300-400m.”

The Kurdish company won one of three licences to operate a nationwide mobile phone network with a $1.25bn bid in August 2007 (MEED 17:08:07).

The other two operators to win a licence were Asiacell, a consortium backed by Qatari operator Qtel, and Zain, the giant Kuwaiti mobile phone group. “We will start mobile phone services in Baghdad in one or two months,” says Akrawi. “The nationwide roll-out will be after Baghdad.”

Until it won the nationwide licence, Korek’s network was restricted to the three provinces controlled by the Kurdish Regional Government: Dahuk, Arbil and Sulaymaniyah. Its network extended into some parts of three other northern provinces - Diyala, Kirkuk and Ninawa - that fell under the control of the regional government in 2003.

Korek has already expanded into the rest of Kirkuk and Ninawa provinces. It launched its mobile phone services in Kirkuk and Mosul, the capitals of the two provinces, in the past two months.

The Kurdish company has yet to appoint a telecoms infrastructure company to supply it with the equipment for a nationwide network. “We are still negotiating with a number of suppliers,” says Akrawi.

Korek has been negotiating with Etisalat, the UAE’s former monopoly telecoms operator, for more than three months about a possible joint venture in Iraq.

“We are still in negotiations with Etisalat and we have not finished the deal yet,” says Akrawi. “We hope to come to a conclusion, but we do not know when because this is a very complicated deal.”

In February, Mohammad al-Qemzi, chief executive officer of Etisalat, announced that the UAE telecoms giant was close to agreeing a joint venture with Korek Telecom (MEED 28:02:08).

Etisalat is continuing to hold talks with Korek, but it does not know when it will be able to form a joint venture with the Kurdish company, says Mohammad Hassan Omran, its chairman .

Korek started operations when the US enforced a no-fly zone over northern Iraq in the 1990s. The company continued to operate after the US-led invasion of Iraq in 2003, despite its failure to win a short-term licence from the Coalition Provisional Authority later that year.

Korek traded in defiance of the central government in Baghdad until August last year, when it was allowed to enter the bidding for a long-term licence.

The Kurdish company is much smaller than its two rivals as it still operates in a relatively small area of Iraq.

It had 570,000 customers at the end of September 2007, when it last reported its figures. Asiacell had nearly 4 million customers at the end of last year and Zain had more than 7.1 million.

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