Arab telecom giants vie for Iraqi licences

Iraqi mobile subscriptions surged to 5 million in the country of 26 million people at the end of 2006 from virtually nothing three years earlier. (Getty Images)

Iraq has set $300 million as the starting price in an auction for three 15-year mobile phone licences, the communications minister said today.

"The price will start from a certain level which is $300 million plus 18% revenue sharing," Communications Minister Mohammed Allawi told Reuters ahead of the auction.

The Iraqi government is holding the auction in the Jordanian capital of Amman today. The licences replace three short-term contracts awarded in 2003.

Egypt's Orascom Telecom, Turkcell and groups including Kuwaiti and Qatari mobile companies are alll expected to bid for the licences, according to an Iraqi news agency.

"Five companies will compete in the auction: Atheer, Orascom, Asiacell, Korek and Turkcell," Iraqi government spokesman Ali Al-Dabagh was quoted by the Voices of Iraq agency on its website.

Turkcell, Turkey's leading mobile phone operator, has said it would bid for a licence in Iraq, where mobile penetration is expected to more than double in less than three years.

Qatar Telecommunications (Qtel) has said it was joining a consortium including Asiacell for the bidding. Qtel owns 40%of Asiacell through Kuwait-based National Mobile Telecommunications (Wataniya), which it took over in March.

Kuwait's Mobile Telecommunications Company (MTC), the third-largest Arab telecom company by market value, has operated MTC Atheer in Iraq on a short-term licence and said it was seeking a long-term permit.

Orascom already operates an Iraqi subsidiary called Iraqna.

Iraq's Korek Telecom operates in the country's northern Kurdish regions.

"Iraqi citizens may possess as much as 45% of the three companies' shares, and the Iraqi government would receive 18% of the companies' annual profits," Dabagh was quoted by the agency as saying in a statement.

Iraqi mobile subscriptions surged to 5 million in the country of 26 million people at the end of 2006 from virtually nothing three years earlier because the fixed-line network was hit by sanctions after Iraq's invasion of Kuwait in 1990 and barely survived bombing during the 2003 US-led invasion.

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