Regional telcos win GSM licences

10 October 2003
Three groups of Middle East telecoms companies have been awarded licences by the Coalition Provisional Authority (CPA) to set up mobile networks in Iraq, despite fears that restrictions in the tender documents on public ownership would prevent many regional firms from bidding. All three groups are proposing to use European GSM platforms for their networks, rather than US-standard code division multiple access (CDMA) technology (MEED 1:8:03).

The licences cover northern, central and southern Iraq, and after two years operators will have the option to extend their concessions to national coverage in order to have three countrywide competing networks by mid-2006. 'The services should start in a few weeks, hopefully by the end of the month,' interim Telecommunications Minister Haidar el-Abbadi said on 6 October. 'The maximum cost per minute would be 10 cents [$0.10].' Call tariffs are expected to rise over the two-year licence period.

Asia-Cell, a consortium of the local Asia-Cell Telecom(51 per cent), Wataniya Telecomof Kuwait (40 per cent) and Bahrain-based United Gulf Bank (9 per cent), has been awarded a licence for the northern region, where Asia-Cell Telecom already operates a small GSM network based in Suleimaniya. 'The network deployment programme will commence immediately after the signing of the licence,' the group said in a 7 October statement. 'Within two months the existing Asia-Cell network is planned to expand to provide coverage to other areas in the northern region.'

A consortium led by Cairo-based Orascom Telecom, in which two investors identified as Egyptian businessman Alaa el-Khawaja and the local Allied SAbothhold minority stakes, has been awarded the licence for the central region. Orascom Telecom Iraq Corporation (OTI) is planning to fund the estimated $100 million rollout with financing from the US' Motorolaand France's Alcatel, which will supply equipment for the network. 'We are hoping for 1 million subscribers in the first two years,' OT chairman and chief executive officer Naguib Sawiris said on 6 October.

The licence for the southern region of Iraq has been awarded to Atheer Telecom Iraq, which comprises Mobile Telecommunications Company (MTC) of Kuwait, the local Dijla Telecommunications Corporation and Kuwait-based Kharafi Group. 'We are talking about investing between $100 million-120 million over the next two years,' MTC director general Saad al-Barrak said on 6 October. 'We expect to have 300,000 subscribers within two years.'

The licences grant operators about one third of the available 900-MHz bandwidth, while a contingency band of about 1,700-1,800 MHz has been held in reserve.

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