Last Updated: Wed Oct 26, 2011 09:56 am (KSA) 06:56 am (GMT)

Decision on Iraq fourth mobile license in November: minister

Mohammed Allawi, Iraq’s communications minister said he intends to have an auction for a fourth mobile operator by the end of the year depending on how quickly the cabinet responds to the proposal. (Reuters)
Mohammed Allawi, Iraq’s communications minister said he intends to have an auction for a fourth mobile operator by the end of the year depending on how quickly the cabinet responds to the proposal. (Reuters)

Iraqi Communications Minister Mohammed Allawi said he expects a decision from the cabinet next month on a request to approve a 4th license for Iraq’s burgeoning mobile phone market.

Zain Iraq, a unit of Kuwait’s Zain , Asiacell, an affiliate of Qatar Telecom , and Korek, part-owned by France Telecom SA and Kuwait's Agility , hold the first three mobile licences in a market that has exploded since the 2003 U.S.-led invasion.

“I have submitted all the papers to the council of ministers,” Allawi told Reuters in an interview late on Tuesday before the opening of a telecommunications conference in Istanbul. “I should get a response definitely, God willing, within November.”

Allawi has repeatedly said he intends to have an auction for a fourth mobile operator by the end of the year but meeting that deadline depends on how quickly the cabinet responds to the proposal.

While mobile phones were introduced in Iraq’s northern Kurdish region in 1999, the rest of the country did not have a mobile market under Saddam Hussein.

There are now around 23 million mobile subscribers, according to the Communications and Media Commission (CMC), which regulates telecommunications. Iraq has a population of about 30 million.

Zain, Asiacell and Korek were required by Iraqi law to launch initial public offerings on the Iraq Stock Exchange by Aug. 31 as part of their 15-year, $1.25 billion operating licenses secured in 2007.

All three missed the deadline. The CMC said earlier this month that the companies were unlikely to list until the middle of next year and would not be penalized for missing the deadline.

Allawi said the operators’ shares should be issued “gradually” to avoid flooding the market.

“If you put all the shares (at once), the price will collapse for sure,” he said.

Iraq’s mobile market has swamped landline and internet penetration. Currently the country has only 1.2 million landlines, of which only 800,000 are in working order. Internet penetration sits at 3 percent.

Allawi has said the Communications Ministry aims to increase this to 10 million landlines within five years, which would give it a 25 percent penetration rate.

Internet penetration would rise to 25 percent once the 10 million landlines mark had been reached.

Allawi said 18 companies are each installing 100,000 fiber lines to homes.

“Our target for 2012 is to have almost 1.8 million lines,” he told Reuters. “So I believe this will increase the (internet) penetration rate dramatically.”

Allawi said he expected parliament to vote on a long-awaited communications law, a crucial step in the development of the telecoms sector, before the end of the year. The sector currently relies on pre-2003 legislation.

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