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Iraqna threatens Baghdad pullout after Contrack quits amid security fears

23 Dec 2004

Naguib Sawiris, the chairman of Egypt-based Orascom Telecom, which owns 63% of Baghdad mobile operator Iraqna, says his company is considering withdrawing from Iraq amid ongoing concerns over security in the country and a recent rise in levels of violence. The move comes in the wake of a similar decision by Contrack International, a US subsidiary owned by the Sawiris family, to pull out of a USD325 million reconstruction contract to rebuild Iraq’s transportation sector, citing high security costs. Mr Sawiris said ‘I’m not in the business of putting the lives of my people in danger’, adding that if security wasn’t improved the authorities would struggle to find anybody willing to work in the country.

Iraqna originally pledged to spend at least USD100 million on its network for the duration of its two-year licence and at launch, sold itself as much as a fashion accessory as a service, spending much time and effort in raising public awareness of its business. However, its launch day turned into something of a public relations fiasco when the media – both local and international – focused much of their attention on customer dissatisfaction at the high prices of the new service. The cheapest handset cost USD109 (rising to as much as USD700 for a Samsung camera phone) and there is an activation fee of USD69, whilst a monthly fee of USD10 is automatically deducted from each USD20 airtime credit voucher, effectively cutting the purchased call time in half.

In recent months Iraqna’s already patchy service in the capital and central region of Iraq has deteriorated, with the network sometimes down for days at a time. Mr Sawiris is keen to level blame at the interim government and the US military whom, he argues, are jamming radio signals because of worries that terrorists could use mobile phones to detonate bombs. The chairman’s threat comes a week after a US/Iraqi raid on Iraqna’s headquarters in which computers and databases were confiscated and two Egyptian security managers arrested. Although both were later released without charge, a US military spokesman said the men had been suspected of ‘co-operating with the resistance’.

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