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Telecommunications in Iraq - Expanding Sector

posted on: Jul 16, 2009

Iraq is seeking to attract more foreign investment into its telecommunications sector as it moves to create a modern telecoms market with fixed, mobile and broadband services available to customers throughout the country.

Millions of Iraqis are now connected to the country’s highly accessible modern mobile-based communications infrastructure which has transformed Iraq’s communications system beyond recognition in under a decade. A lot has clearly been achieved but much still needs to be done before the full range of telecommunications services can be accessed by all Iraqis.

The benefits that the development of modern telecommunications has brought to the people in terms of improved services and to the economy are already tangible.
Traders can now buy and sell, distribution chains can be more easily managed, emergency services and healthcare are becoming more accessible and government has become easier to co-ordinate. All these advantages mean that the sectors dramatic expansion is sure to continue.

Telecommunications usage has accelerated rapidly over the past few years from an extremely low base. Mobile telephone use has seen the most rapid growth. The pace of growth in the sector is slowing down, but there is still ample scope for expansion providing opportunities for investors.

Internet use continues to grow and companies are investing in new infrastructure.
Considerable efforts are being put into developing fixed wireless connections at local level rather than upgrading the analogue telephone system.

In January this year, Asiacell, which is the largest private Iraqi company and the first and only mobile telecommunications operator to provide coverage for all of the country, stated that the number of its subscribers in Iraq had exceeded six million. Meanwhile, Zain said it had reached a total of 9.68 million subscribers by the end of 2008.

In total, Iraq’s mobile providers now serve around 20 million customers and industry research suggests that total subscriber accounts will number nearly 27 million by 2013.

“Many private sector companies have already made sizeable commitments to developing commercial enterprises in the communications sector, demonstrating that this is an area of the economy that is open to both Iraqi and international investors,” says Minister of Communications Farouk Abdel Qadir Abdel Rahman.

The Ministry of Communications is actively encouraging private investors to participate in the development of the country’s telecommunications system.
Since 2005, Iraq has licensed three nationwide and three local fixed wireless local loop (WLL) service providers who are now building networks to deliver a full range of telecommunications services.

Initially, these include Internet-based voice and data services to be followed by television and other media services which are due to be made available in future.

The telecommunications sector is regulated by an independent commission called the Commission of Media and Communications (CMC) which was established in 2004.

This body regulates the sector on the basis of private sector universal access. It aims to encourage private sector participation by “adopting a competitive and just framework”. It is committed to making telecommunications one of the growth engines of the country’s economy.

The CMC is responsible for granting licences, issuing fees and tariffs, and managing resources such as spectrum frequencies and international communications.
Comprehensive broadband internet services are undergoing important development. By 2011, the CMC aims to see that 92 percent of Iraqis have access to voice services and affordable advanced third-generation telecommunications.

The three national licences were issued for a ten year period with the possibility of a five-year renewal. In contrast the local licenses are to last for eight years.

Within the context of the expansion of the telecommunications system, a wide range of opportunities have opened up for suppliers of hardware and communications solutions.

Major companies are looking to establish their presence in the country. An Ericsson Middle East spokesman has spoken optimistically of the Iraqi market as “one of the most strategic markets for growth”.

A flurry of developments in the sector include the signing in March this year of a joint venture between provider Kalimat and Hong Kong based telecoms provider PCCW to launch IPTV and mobile TV services, which are planned to be unveiled by the end of the year.

Meanwhile, at the start of the year, the State Company for Internet Services (SCIS) launched tenders for Wi-Fi services and for a satellite package for the provision of internet services.

Telecommunications services are constantly being developed and unveiled. Recently, Asiacell announced that it had the signed an e-banking cooperation agreement with Amwal, a consortium of leading private Iraqi banking institutions. The deal, made public on 13 July, will make Asiacell the first mobile company to provide e-banking services and when up and running this will enable all Iraqi citizens to settle their financial transactions using their mobile phones at any time and from any location without the need to visit their bank.

Asiacell’s subscribers will have access to several banking services that allow inter-bank transfers and the settlement of bills, the purchasing of items using VISA card or MasterCard, accessing ATM services, checking account balances, and transferring funds via special codes.

Telecommunications infrastructure continues to be repaired and built with major projects sponsored by international donors. Reconstruction work has centred on the main cities and a substantial amount of work still needs to be done to rehabilitate exchanges, build modern telecommunications transit and routing facilities and creating a reliable and extensive fibre optic network.

Additional exchange facilities are being built in the capital and around the country to set up a sound telecommunications infrastructure. Furthermore, underground fibre optic networks are being expanding.

David Morgan
Global Arab Network

Caption for Enclosed Picture:
Opportunities for investors exist in Iraq’s rapidly expanding telecommunications sector which has seen unparalleled growth and development in the last few years.