Arabian Business Weekly Update 24th August 2004

When it comes to handing out awards for best business practice, the Iraqi government is not a name that usually springs to mind. But for once, it deserves praise for the way it has attempted to build a mobile phone network in the country.

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By  Anil Bhoyrul Published  August 23, 2004

Editorial Leader|~||~||~|

Putting the consumer first?

When it comes to handing out awards for best business practice, the Iraqi government is not a name that usually springs to mind. But for once, it deserves praise for the way it has attempted to build a mobile phone network in the country. First and foremost, it decided to restrict the participation of state monopolies, ruling out the likes of Etisalat. The Iraqis rightly believed that state firms, with no experience of operating in a competitive market, would not be best suited to deliver what the Iraqi people desperately need from the telecommunications industry. Companies that thrive on competition have the best chance of delivering the best possible quality on service and price. Last month was also decision time for the Saudi Arabian government, which finally awarded its second GSM licence. The winner, with an arguably high price of US $3.47 billion, was Etisalat. How could Etisalat afford such a high price? Because it is a superbly run state monopoly. And what does a state monopoly know about competition? Absolutely nothing. The Saudi population is hoping for improved services at low prices. The penetration rate in the country is just 32%, and wireless voice communications are not of the highest standard. Developing the best possible GSM network is vital to the future of the kingdom and its people. For once, the Saudis should have taken a leaf out of the Iraqi business manual. Etisalat deserves congratulations for its victory. The loser, however, could be the Saudi consumer.||**||

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