- The Washington Times - Monday, October 6, 2003

BAGHDAD (AP) — Iraq awarded mobile-telephone contracts to three Middle Eastern companies, the communications minister said yesterday, with wireless phone service expected to begin within weeks for a country that for the most part never has had it.

“This is an important day for Iraq,” said Communications Minister Haider Jawad al-Aubadi. “Iraq badly needs the mobile system to enhance the security of the country.”

The mobile system will help especially in the capital, Baghdad, where coalition bombers knocked out 12 land-line telephone exchanges during the U.S.-led war in the spring. About 76 percent of phone lines in Iraq are working, with 259,000 lines still out of service, mostly in Baghdad.

The wireless construction also will bring hundreds of millions of dollars in foreign investment into the country.

AsiaCell was given the contract to operate in the northern third of the country; Orascom was given the central region, including Baghdad; and AtheerTel will cover the south.

The companies all operate with the phone standard widely used in Europe and the Middle East.

Orascom is an Egyptian telecommunications company. “We are proud, as Egyptians, to be with the Iraqi people in this phase of crossing over to a reconstructed Iraq,” Orascom Chief Executive Officer Naguib Sawiris told Al Arabiya satellite television.

AtheerTel is a joint venture between the Kuwaiti wireless company MTC, private Kuwaiti investors and Iraq investors in a group called Degla, said Saad al-Barak, general manager of MTC. He said the consortium would be ready to provide services within two months and aimed at getting 300,000 subscribers.

A Kuwaiti official speaking on the condition of anonymity said AsiaCell, which operated in the Kurdish north during Saddam Hussein’s rule, had taken Kuwait National Telecom as a small percentage partner.

Each of the three winning bidders had between 10 percent and 50 percent local ownership, Mr. al-Aubadi said.

The licenses were issued after 35 companies submitted more than 100 bids. The bidding, conducted by the U.S.-led Coalition Provisional Authority, closed Aug. 21. Mr. Al-Aubadi said the announcement of the winners was delayed until yesterday because he needed time to review the submissions. He was named minister Sept. 4.

During the summer, Bahrain’s telephone company, known as Batelco, spent $5 million setting up a wireless network in Baghdad without the permission of the U.S.-led authority, which ordered the company to cease service.

Other than that short-lived network and existing systems in Kurdish areas, Iraq’s only postwar wireless service consisted of a Pentagon-funded system installed for officials in Baghdad by WorldCom Inc., now known as MCI, and a temporary network in the south set up by MTC and Britain’s Vodafone.

During the bid process, authority officials said, the winners would have to put up a $30 million bond, with the licenses lasting for just two years, forcing the network operators to hope for a renewal afterward.

Once the networks are built, calls will cost 8 cents to 10 cents per minute, Mr. al-Aubadi said, and phones will cost from $50 to $60.

“Until now, we were denied mobile phones. Iraqis will welcome the chance to use mobile phones to talk to their families, friends and for business,” he said. “The race is now on to see which of the three will launch the first service to the public.”

At least one American company stands to benefit from the contracts. Network equipment supplier Motorola Inc. has contracts with Orascom and MTC and helped both companies assemble the winning bids, Motorola spokesman Norm Sandler said.

He would not specify the monetary value of the deals or say whether Orascom and MTC have designated Motorola as their exclusive supplier, though he said that “we look forward to participating with them in these initiatives.”

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