Nowadays, most people take mobile phones for granted. Although the technology is still relatively new, the ability to remain in constant communication with friends, family and colleagues is now so commonplace that in most places the novelty is beginning to wear off.
Nowadays, most people take mobile phones for granted. Although the technology is still relatively new, the ability to remain in constant communication with friends, family and colleagues is now so commonplace that in most places the novelty is beginning to wear off. In Iraq, however, the story is rather different. Not only are mobiles very much a novelty - their use was forbidden during the reign of Saddam Hussein - but they have also come to be seen as an essential tool for people to let loved ones know that they are safe. In such an insecure environment, call charges of up to $0.75 a minute have proved no barrier to mobile usage. Despite an average income of $150-250 a month, Iraqi citizens spend 30-50 per cent of their earnings on phone-related expenses. 'Mobiles are extremely important in Iraq because of the fragile security situation,' says Taha Rangwala, a senior analyst at communications firm Pyramid Research. 'As in Israel, they have become more important than owning a car or having a bank account.' When the US-led Coalition Provisional Authority (CPA) issued licences for GSM services in Iraq at the end of 2003, it was only an interim measure. Three licences were issued for a period of two years, and for the first 12 months they were restricted to regional coverage. But the brief history of Iraqi mobile telephony has been enough to demonstrate the lucrative potential of the market. Since their licences entered into force in the last days of 2003, each of the three operators - Iraqna, a subsidiary of Egypt's Orascom Telecom; MTC-Atheer, part-owned by Kuwait's Mobile Telecommunications Company (MTC); and Asiacell, part-owned by Wataniya Telecom, also of Kuwait - has attracted about 1.5 million subscribers. By the end of the year, 5 million of the country's 26 million population are expected to own a mobile phone. The current licences are due to expire on 22 December, and in November Baghdad will receive bids for four-five new licences, each providing for nationwide coverage for 15 years. In addition to the three incumbents, interested bidders are understood to include Saudi Oger, Turkcell, Bahrain Telecommunications Company (Batelco) and Emirates Telecommunications Corporation (Etisalat). The Iraqi government, in consortium with the Iraqi Telecommunications & Post Company, is also expected to submit a bid. Baghdad is not alone in opening up its mobile market. In the past 12 months, both Riyadh and Muscat have seen new GSM entrants, while further licences are on the horizon in Iran and the UAE. And in late October, Cairo will shatter the existing MobiNil/Vodafone Egypt duopoly when it launches the much-anticipated competition for the licence to operate its third mobile phone network (see pages 55-56). Iran, like Iraq, is an underdeveloped market. In 2004, there were only 4.3 million mobile subscribers amid a population of 70 million, and network services provided by the incumbent Telecommunications Company of Iran (TCI) are of poor quality. Dropped call rates - measuring the number of calls interrupted by network failure - are very high, voice clarity is poor and phones often become unusable when their user is on the move. With a second operator due to join the market, experts believe that the Islamic republic is on the cusp of a huge acceleration in penetration. 'In the next five years, the total number of subscribers is expected to grow to more than 16 million,' says Rangwala. 'This represents a huge rate of growth that will ensure a staggering return on investment for the new licence operator.' With such strong growth prospects, experts believe that a third licence may well be tendered as early as 2007. The country's second GSM licence was awarded in early 2004 to Turkcell, but ever since the process has been characterised by confusion and delay. A breakthrough was apparently achieved in ear