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Last Updated: Thursday, 31 July, 2003, 16:47 GMT 17:47 UK
Firms banned from Iraq mobile bids
US soldier
The US plans its own mobile tender
Rules drawn up for mobile phone licences in Iraq by the US authorities in Iraq could bar many of Europe's biggest telecoms companies - and almost all those in the Middle East - from bidding.

The rules - issued by the coalition authorities ahead of a bidders' conference in Jordan on Thursday - ban governments from "directly or indirectly own(ing) more than 5% of any single bidding company or single company in consortia".

That rules out - among others - Orange and T-Mobile, two of Europe's biggest operators, because the French and German governments still own significant stakes in their parent companies.

Experts said the rule could give US companies an advantage - as could another rule which demands evidence of five other contracts or licences held.

US licences are handed out on a regional basis, so even a company operating only in the US could well have a handful of licences to put on its application.

Most other countries issue them only on a national basis, therefore meaning that bidders would have to have operated in five separate countries.

Arab shutout?

The rules also mean that neighbouring Arab companies may well be out of the running - including Batelco, the Bahraini telecoms company which until earlier this week was running an unofficial GSM-based mobile network in Baghdad.

Some of the firms with significant state ownership which could be barred under bidding rules:
Orange (France)
T-Mobile (Germany)
Telefonica Moviles (Spain)
KPN (Netherlands)
NTT DoCoMo (Japan)
Batelco (Bahrain)
MTC-Vodafone (Kuwait)
Etisalat (UAE)
After a few days of operation, in which foreign journalists, businessmen and aidworkers suddenly found their home mobiles were unexpectedly working, the US authorities forced Batelco to pull the plug on its $5m operation.

Batelco has made clear that it still wants to bid for one of the three licences on offer in Iraq if it is permitted to, probably in consortium with an Iraqi company.

Kuwait-based MTC-Vodafone, which is partly owned by UK-based mobile giant Vodafone, is also intending to bid given that it runs a network in southern Iraq for the British authorities - although it, too, is 25% government owned.


One factor in the Iraqi mobile saga which has excited particular interest is the question of which mobile standard will be used.

While all neighbouring countries work on the GSM standard which is used by 70% of mobile subscribers worldwide, there has been pressure from the US to favour the cdmaOne standard invented by US company QualComm.

Some Republican congressmen with ties to QualComm have said that would help US companies win deals to build the networks.

But the licence rules require winners to "provide full national and international roaming service to their customers through agreements with other Iraqi licensees and with a wide range of operators in trading partner countries".

Almost all Iraq's trading partners use GSM, and cross-network roaming - whether domestic or international - is both technologically difficult and very expensive.

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