WAR! What is it good for?

21 Mar 2003

With the war in Iraq just days old there already looks to be a clear winner: the regional telecommunications players. The massive influx of aid and news agencies to the Gulf region will bring with them increased demand for satellite and wireless communications services, which could prove lucrative for regional operators. Additionally, a number of global telcos will be keeping an eye on the outcome of the war as a regime change in Iraq would present a massive investment opportunity to redevelop the country’s limited communications networks. The UN Development Programme estimates that EUR28.5 billion will be spent on reconstructing the country over a three year period should the Allies triumph. Wireline teledensity in Iraq dropped from 5.6% before the first Gulf war in 1990 to just 2.8% by 1999, where it has remained ever since. Mobile infrastructure is even more limited, especially in the central and southern areas, whilst there is no commercial cellular network available in the capital, Baghdad. At present, the only developed mobile network is operated by Kurdtel, which was formed by the Patriotic Union of Kurdistan (PUK) and serves the Kurdish enclaves in north of the country.

Meanwhile, the war is stirring growth in the communications industry worldwide. In China, ISP Sohu.com reported 20,000 new subscriptions to its CNY25 a month SMS news service in the hours following the start of the conflict. Its rival Sina.com has seen traffic on its site double and expects the war to have a similar effect on use of its SMS service. A number of operators in the Philippines have boosted network capacity in anticipation of a surge in cellular usage from the families of the 1.3 million Filipino’s working in the Middle East. Online, US web monitor Comscore Media Matrix reported 41% more traffic on the country’s top 15 news sites whilst the UK’s largest ISP Freeserve today announced that ‘war’ was now the most popular search term being inputted into online search engines, far outnumbering those seeking information on the perennial favourites of ‘sex’ and ‘Britney Spears’, or a combination of the two.