Setting standards for Iraq

While communications infrastructure is usually not an area I would comment on in Channel Electronic Edition, a story caught my eye last week that potentially could affect a lot of business in the region, both in terms of what business is done and how it is carried out.

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By  Mark Sutton Published  August 9, 2003

While communications infrastructure is usually not an area I would comment on in Channel Electronic Edition, a story caught my eye last week that potentially could affect a lot of business in the region, both in terms of what business is done and how it is carried out.

The story concerned the regulations being put in place to set up new mobile phone networks in Iraq. And while I wouldn’t normally comment on political issues anymore than I would on communications infrastructure, I would have to say that the Americans seem to be making a right mess of it.

The problem has been caused by the rules drawn up by the US authorities regarding bids for mobile networks in Iraq. The rules effectively bar just about any Middle Eastern telco operator from bidding, and potentially saddle Iraq with a mobile network that most handsets in the Middle East can’t operate on.

The rules for bidders stipulate that telcos cannot bid if they are more than 5% owned by a government, and bidders must also have at least five other mobile licenses. This would mean that almost all of the Middle East telcos could not bid, because of government ownership, and many of the experienced European telcos could not bid either for the same reason.

US telcos on the other hand, are not only free of government ownership, but because licences in the US are issued on a regional basis, meeting the five licence level is within reach of most of them.

The fact that America’s mobile system is a mess hasn’t occurred to the authorities, apparently. Neither has the fact that telcos in the region, who already have expertise and resources in place, and are much more likely to have a long term stake in running a network in Iraq, will be excluded from bidding. In terms of penetration, services and development, the US is pretty much backwards about mobile, yet the rules are being set that will see Iraq’s mobile networks run by US telcos.

Even worse is the possibility that a US company won’t back the GSM standard, that almost everyone apart from the US uses, but might well try to inflict the CDMAone standard instead. Many handsets today are tri-band, but not that many, and not at a price point to make them easily affordable by normal Iraqis. A CDMAone network in Iraq will leave the country isolated in terms of mobile communications, an island of CDMA in an ocean of GSM.

This can only make life more difficult for businessmen travelling to Iraq, and for those already there who need international communication to do their business.

While there might be a revenue stream in importing CDMA handsets to the Middle East, the prospect of a CDMA network is not a good one for the channel or for anyone else. It is possible that the US authorities might listen to the region’s experts and rethink their approach to the bidding requirements, but then again, that’s something else I wouldn’t normally comment on...

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