Iraq may auction off up to five new wireless licences (21/07/05)

Iraq hopes to auction off two to five mobile phone licences by the end of this year to replace the country's three expiring wireless licences, the head of Iraq's communications watchdog said on Thursday.

Siyamend Othman, chief executive of Iraq's National Communications and Media Commission (NCMC) regulator, told a London news conference that the licences might last for 15 years with a possible extension of five years.

Othman, in London for a two-day consultation with Iraqi Communications Minister Jowan Masum and international telecoms industry representatives, said he hoped to conclude discussions in September, but that nothing was yet set in stone.

Asked how many wireless licences were likely to be awarded, he said, "Logic says two to five licences." He added that the final number would depend on whether Iraq wanted to focus on raising proceeds or ensuring as much competition as possible.

But when it came to raising cash, he said: "We are going to try to get as much as we can. There are techniques for doing that and we plan to use every technique in the book."

A quarter of a century of wars and crushing sanctions have badly damaged Iraq's communications network, and mobile phones were only introduced in the country of about 27 million people after the US-led invasion in 2003.

With only about three per cent of the population with a fixed-line phone, the country is increasingly dependent on mobile networks, which have more than two million customers as people struggle to stay in touch and do basic business.

Transparent process

Othman emphasised that he was keen to ensure a transparent auction process and level playing field. He was determined to ensure that winning bidders would not have to "know some big shot and buy him a yacht". "We need help. Indeed we need help," he said. "But we are determined (to ensure a fair process)."

The new national licences will replace three regional ones issued by the US-led occupation authority in 2003. Egypt's Orascom Telecom currently holds the licence for central Iraq, while Kuwait's MTC covers the south, and two mostly Kurdish operators have effectively split the licence for Iraqi Kurdistan.

Iraqi Minister of Communications Jowan Masum said that she would work with private groups and saw it as "a business investment". But Othman said "several" European telecoms operators had also shown informal interest in licences, which are expected to be continue to offer wireless services based on GSM (Global System for Mobile Communications) technology, which is also used by neighbouring Arab countries as well as across the world.

Mobile phone network operators, which say they have sunk about $300 million each into their regional networks over the last two years, will be able to negotiate a separate sale of their infrastructures under the planned new licence rules.

But MTC's Chief Executive Ali Al-Dahwi, who says he has about 700,000 mobile phone customers, an all-Iraqi work force of 600 and will have invested $430 million in Iraq by year-end, told reporters that he could not conceive of losing his licence.

"I will not even tolerate the thought that we will not get another licence," he said, adding that he was not some "Johnny come lately" to the market, but had always planned to be there for the long term.

Source: Reuters