.Iraq sells three mobile licences for $3.75 billion
AMMAN: Iraq sold three mobile phone licences for $3.75 billion to Kuwait’s Mobile Telecommunications Co (MTC), Asiacell and Korek on Friday, in a country that relies on cell phones after war and sanctions hit landlines.
The three firms, which already run networks in the war-torn country, made the highest bids in an auction in the Jordanian capital that began on Thursday.
“To get the best return from the auction in such circumstances is a great vote of confidence in the Iraqi economy,” Iraqi Finance Minister Bayan Jabor told reporters in Amman. The winners will also share 18 percent of the revenues with the government.
TurkCell and Egypt’s Orascom Telecom had also bid for licences but dropped out of the race for one of the few sectors to thrive amid Iraq’s instability and crumbling infrastructure.
The fixed-line network was hit by sanctions after Iraq’s invasion of Kuwait in 1990 and by bombing during the U.S.-led invasion in 2003. Less than 4 percent of Iraqis have landlines.
Orascom’s withdrawal appeared to be a major upset as the operator was the first to provide a full mobile phone service in Baghdad after the 2003 invasion, through its Iraqna subsidiary.
The company had invested almost $300 million in Iraq since it first won the rights to operate there in October 2003. Iraqna’s Web site says it has around 3 million subscribers, representing just over a third of the market.
The 15-year licences replace three short-term contracts awarded soon after the invasion.
MTC began in the south of Iraq through its Atheer network. Asiacell is 40-percent owned by Qatar Telecommunications Co through Kuwait-based National Mobile Telecommunications Co., which it took over in March.
Asiacell began operating in the Kurdish north in 1999. Korek Telecom is based in the city of Irbil in Iraqi Kurdistan. Iraqi mobile use rose to 8 million out of a population of 26 million at the end of 2006, from virtually nothing three years earlier, according to officials.
The finance ministry will levy 15 percent tax on the profits of the mobile companies on top of the revenue-sharing. There is a widespread belief that the original licences were offered too cheaply to existing operators. reuters
Daily Times
The three firms, which already run networks in the war-torn country, made the highest bids in an auction in the Jordanian capital that began on Thursday.
“To get the best return from the auction in such circumstances is a great vote of confidence in the Iraqi economy,” Iraqi Finance Minister Bayan Jabor told reporters in Amman. The winners will also share 18 percent of the revenues with the government.
TurkCell and Egypt’s Orascom Telecom had also bid for licences but dropped out of the race for one of the few sectors to thrive amid Iraq’s instability and crumbling infrastructure.
The fixed-line network was hit by sanctions after Iraq’s invasion of Kuwait in 1990 and by bombing during the U.S.-led invasion in 2003. Less than 4 percent of Iraqis have landlines.
Orascom’s withdrawal appeared to be a major upset as the operator was the first to provide a full mobile phone service in Baghdad after the 2003 invasion, through its Iraqna subsidiary.
The company had invested almost $300 million in Iraq since it first won the rights to operate there in October 2003. Iraqna’s Web site says it has around 3 million subscribers, representing just over a third of the market.
The 15-year licences replace three short-term contracts awarded soon after the invasion.
MTC began in the south of Iraq through its Atheer network. Asiacell is 40-percent owned by Qatar Telecommunications Co through Kuwait-based National Mobile Telecommunications Co., which it took over in March.
Asiacell began operating in the Kurdish north in 1999. Korek Telecom is based in the city of Irbil in Iraqi Kurdistan. Iraqi mobile use rose to 8 million out of a population of 26 million at the end of 2006, from virtually nothing three years earlier, according to officials.
The finance ministry will levy 15 percent tax on the profits of the mobile companies on top of the revenue-sharing. There is a widespread belief that the original licences were offered too cheaply to existing operators. reuters
Daily Times
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