Iraq phone chief tries to tempt investors (22/07/05)

London played host to one of its more unusual investment roadshows yesterday as representatives of the Iraqi telecommunications regulator came to town to look for investors in the country's fledgling mobile phone industry.

Iraq is one of the least developed telecoms markets in the world - just three per cent of the country, for instance, has access to a land line.

In 2003, the interim administration awarded three regional licences to set up Iraq's first mobile networks. Since then, more than two million people have snapped up phones, making Iraq one of the world's fastest-growing mobile markets.

Those licences will expire next year and in their place the National Communications & Media Commission (NCMC), the independent regulator set up just over a year ago, plans to auction up to five new national licences lasting 15 years.

The NCMC started a two-day meeting in a West London hotel yesterday to help shape the country's new mobile industry with a view to licences being put out to tender by the end of the year.

Alongside the holders of the original three licences - Iraqna, owned by Egypt's Orascom, Asiacell, and the Kuwaiti-backed MTC Atheer - the conference is also being attended by western infrastructure players including Ericsson, Marconi, Motorola, Nokia, Nortel and Siemens. Several western mobile operators are also thought to be watching with interest although Vodafone is understood to have ruled itself out.

The head of the NCMC, Siyamend Othman, pledged to hold an open and transparent auction and had some strange reassurance for investors who might think doing business in Iraq is next to impossible. He said: "We had the three incumbent operators in today saying 'security, security, security' and what a major problem it was. I think that they are exaggerating a little bit because the mobile telecoms world has a specificity which the other industries do not have.

For instance, Iraqna, the mobile operator in Baghdad and Iraq's central region, was warned by insurgents in the town of Fallujah that they would be attacked if they did not install a phone mast.

"I am not saying there are no security problems," said Mr Othman. "But the security threats that the mobile companies are subject to are of a different nature to those (faced by companies) who have been trying to rebuild infrastructure."

In effect, if the general population is going to be offered the benefits of communication for the first time it must be accepted that terrorists will also have handsets. "I don't think that we can introduce a system where, when you buy a mobile phone, we ask if you are a terrorist," he admitted.

Ali al-Dahwi, the Iraqi-born president of MTC Atheer, which won the first licence to operate in southern Iraq, is less dismissive of the threat but believes Iraq's potential is huge.

"Iraq is as a dry sponge left in the Sahara desert and at 2pm, you have a single drop of rain on it. And guess what happens?" he said.

To get a deluge of investment, he said: "It is going to take some stability ... once that is there, what you will see is a country that will start building itself so fast it will throw a lot of others in the dust."

Richard Wray

Source: The Guardian