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MoC to auction two new licences

9 Feb 2005

Iraqi telecoms regulator, the Ministry of Communications (MoC), has announced plans to hold an auction for two fixed line licences, inviting bids from local, Arab and foreign companies. The MoC has not revealed when the award of the licences will take place, but it hopes that the project will significantly boost fixed line coverage in the country, and expects it to increase the penetration rate from 2.6% at the end of 2003, to around 25% by 2013. The regulator hopes that the bidding process will attract interest from foreign companies, which would bring much needed investment into the country. The licence winners will work in partnership with incumbent operator Iraqi Telecommunications and Post Company (ITPC) to install and operate fixed line networks. They will be able to offer voice, fax and internet services to homes, businesses and government establishments throughout the country.

The bulk of Iraq’s telephone system was built by French manufacturer Alcatel in the 1980s. In 1990, before the first Gulf War, teledensity peaked at around 5.6%, but Iraq made little or no attempt to rebuild its damaged communications infrastructure in the years following the conflict and the figure has since fallen dramatically. UN sanctions imposed on the country following its invasion of Kuwait meant that the import of telecoms equipment from major foreign manufacturers was for the most part impossible. On top of the limited availability, levels of service were poor, with the unkempt network prone to technological failures which were rarely repaired. A spate of investments in 2002 saw teledensity temporarily rise as high as 3.43%, but the advent of the ‘war on terror’ soon put that figure into freefall.

In mid-2003 the Coalition Provisional Authority (CPA) took on the task of rebuilding the shattered infrastructure of the ITPC. Work began in September 2003 and was completed the following February; by the time the CPA came to hand control back to the Iraqis, it had reinstated 203,145 lines in Baghdad. There was far less damage to the PSTN outside Baghdad, with only around 5% of the 250,000 damaged lines being beyond the capital. The CPA contracted several firms to provide infrastructure and systems and assist with regeneration, including US-based Bechtel International, Chinese vendor ZTE and New Zealand firm Argent Networks.

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