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Last Updated: Monday, 6 October, 2003, 16:33 GMT 17:33 UK
Iraq awards mobile phone licences
Phone lines being fixed at public communication centre hit in Baghdad
Phone lines were battered during the recent war
The authorities in Iraq have awarded three mobile phone licences as part of moves to rebuild the war-shattered country's infrastructure.

The Iraqi Communications Ministry granted licences to three consortia: one led by Orascom Telecom, an Egyptian firm, and the others to groups led by Asia Cell and Atheer Tel.

All three include Iraqi firms, and the second two have significant representation from neighbouring Kuwait, which Iraq - under Saddam Hussein - invaded in 1990.

Reports have suggested half the land lines in Iraq are still down because of war damage and subsequent looting at the telephone main exchanges.

"Iraq badly needs the mobile system to enhance the security of the country," Communications Minister Haider Jawad al-Aubadi.

Mr al-Aubadi also stressed the importance to the Iraqi people of reliable communications, saying the first person he himself would call would be his mother.

"Iraqis will welcome the chance to use mobile phones to talk to their family, friends and for business purposes," he said.

Huge potential

The communications minister said he hopes services can begin "within a few weeks", possibly by the end of October.

North: Kurdish group Asia Cell, whose investors include Kuwait's National Mobile Telecommunications (Al-Wataniya) and Bahrain-based United Gulf Bank
Central: Egypt's Orascom Telecom with local and other Arab investors
South: Atheer Tel, 30% owned by Kuwait's MTC, 50% Iraqi investors, 20% other Kuwaiti investors
The terms of the licences commit the groups to getting services up and running within two months.

All three contracts will use GSM technology - the standard mobile phone technology used in Europe and the Middle East.

Some American politicians had urged that the contracts should go to bidders using CDMA technology - the most common network standard in the United States.

The three contracts were carved up regionally. Orascom's network will cover central Iraq, including Baghdad, Asia Cell will serve northern Iraq, while Atheer Tel will operate in the south.

The licences will run for two years, but licensees which complete their networks early will be allowed to expand into the other areas to create competition.

Orascom said its consortium had not paid any money for the licence, but added that it expected to invest "over $100m" in building its network.

Al-Wataniya (NMTC), part of the Asia Cell-led group, said its group's northern network could attract as many as 1 million users over the two years of the licence, using its existing service in the Kurdish areas as a jumping-off point.

And Kuwait's MTC promised its southern network - stemming from the network it already runs for coalition forces in Basra and nearby - would receive up to $120m in investment.

Far behind

Telecoms executives see Iraq as a huge potential growth market.

Its communications systems fell far behind modern standards during the years of sanctions.

Land lines and exchanges were old and inadequate, while mobile phone networks were stunted under Saddam Hussein's rule by a law making it illegal to use a mobile phone.

Karim Qader, a senior Iraqi engineer with Asia Cell - which already operates in the Kurdish region of Sulaimaniya - estimated when bidding opened that the network would take six months to build, and could attract up to two million subscribers.

The BBC's Jill McGivering
"These contracts have been hotly contested"

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