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Iraq to auction 3G licences for at least USD307 million apiece

7 Feb 2014

Iraq plans to offer a number of 3G licences for sale, with bids likely to start at USD307 million, sources familiar with the matter have informed Reuters. According to Ahmed Alomary, a former commissioner at the Communications and Media Commission (CMC), the Council of Ministers have agreed in principle to auction an unspecified number of concessions, while a government source, who declined to be named because of the sensitivity of the issue, confirmed the development.

Interestingly, the Council refused a request from the CMC to automatically grant the 3G licences to the three existing mobile operators – Zain Iraq, a unit of Kuwait’s Zain Group, Ooredoo subsidiary Asiacell and Orange affiliate Korek – the sources said, because to do so would be contrary to the regulator’s statutes. As such, an open auction could potentially allow new entrants into Iraq’s telecoms sector, although the prospect of rolling out a greenfield network from scratch may limit interest.

According to TeleGeography’s GlobalComms Database, plans for the auction of a fourth mobile licence in Iraq received final cabinet approval in May 2010, by which time 15 firms had reportedly expressed an interest in entering bids, including US-based Verizon Communications, South Africa’s MTN Group, Turkcell of Turkey and the UAE’s Etisalat. However, in January 2012 Saudi Telecom Company (STC) reportedly pulled out of the running for the concession, citing the severe delay in awarding the concession, which had been valued at as much as USD2 billion by the Iraqi government.

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