Iraq WLL operator awards contract to Huawei

Kalimat Telecom, a company that was awarded a wireless local loop licence by Iraq's Communications and Media Commission (CMC) last September, today announced the award of a US$275 million infrastructure contract to China's Huawei Technologies.

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By  Tawanda Chihota Published  July 23, 2007

Kalimat Telecom, a company that was awarded a wireless local loop licence by Iraq's Communications and Media Commission (CMC) last September, today announced the award of a US$275 million infrastructure contract to China's Huawei Technologies.

As part of the agreement Huawei will deploy CDMA base stations and assist in the creation of an all-IP infrastructure in four phases beginning this September. Kalimat Telecom president and CEO Wilson Varghese was unwilling to confirm to CommsMEA whether the deal included an element of vendor financing on the part of Huawei.

Kalimat Telecom is in the process of rolling out a nationwide wireless local loop (WLL) network based on CDMA2000 1x technology, but which will also incorporate WiMAX. The operator expects to target residential, business and governmental users, and plans to launch commercially by the end of September.

"We have a business market focus, and our service offering will incorporate voice, data and media content," commented president and CEO Varghese. "We plan to extend the WLL network to over 50 major towns in Iraq and will be the first to market with a location-based intelligent network," he added.

Kalimat forecasts delivering 5 million CDMA lines by 2011, and will have further time to build up its network given the duration of its operating licence is 10 years, plus a five-year extension clause. "The upfront licence fee cost US$25 million and there is a revenue share agreement with the Iraq government that runs to 28% per annum," explained Hassa Abdel Razek, chief marketing officer.

Over 60 companies submitted bids to run a WLL network in Iraq, and only two were awarded in the end, with Kalimat Telecom and a Jordan-based Itisaluna being deemed the winners. Iraq's state-owned Telecommunications and Post Corporation has the right to also roll out a WLL network and no future concessions utilising this technology are set to be licensed.

Razek expects Kalimat Telecom to count around 2,500 staff within the first three years of operation, an overwhelming majority of whom will be sourced from the domestic market. Kalimat executives say they have learnt how best to enter the market given the experience of the three mobile operators, and Razek suggested his company will be relying heavily on attracting talent from the local market.

"We have already invested in the region of US$350 million in the first phase of deployment," commented Varghese. "We believe during the length of our licence, we would have invested about US$1 billion," he added.

Public offering plans are also on the cards, following a period of operation in which Kalimat Telecom is looking to establish itself as the leading fixed wireless provider in the country.

Kalimat Telecom is structured as a consortium and is ultimately owned by Trade Links, a privately held global services company with operations in the US, Kuwait, Iraq, Afghanistan, UAE, Qatar, Bahrain, Poland and Romania. Trade Links continues to seek out opportunities in the region and further a field where to invest in CDMA technology.

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