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Investors warned to stay out of Iraq

Zain Iraq CEO says country is "behind Russia under Stalin"

The CEO of Zain Iraq has issued a stark warning to telecom operators looking to invest in the country, comparing the actions of the country’s ministry of telecommunications to the practices of Stalinist Russia.

The comments were made as UAE incumbent Etisalat, fresh from being stripped of its licence to establish an operator in Iran after it fell out with its Iranian investment partner, is reported to be interested in bidding for a fourth mobile licence in the country. Turkcell and US operator Verizon are also reported to be interested the licence, which according to a report from Bloomberg, will be issued within three months.

“Unfortunately we have an Iraqi government that has is very, very strongly anti-investment,” Zain CEO Ali Al Dahwi told CommsMEA at the Arab Advisors conference in Amman, Jordan.

“Once you invest in Iraq [the ministry] starts acting in a way to teach you lessons. They are very unfriendly and they are very non-accommodating and I think they are going to continue to hurt the Iraqi citizens and the nation by their actions. These actions are unfortunate and will not lead to the bettering of the Iraqi economic status,” he said.

Iraq’s telecoms regulator, known as the CMC (Communications and Media Commission), has been without a director since April 2008, when the previous head, Dr Siyamend Othman, completed his term in office.

According to Al Dahwi and senior figures at rival operator Asiacell it has led to a chaotic situation.

“It is the government that is directing the regulator so I don’t know anymore who is the boss, or who I go to. As an investor this is the problem in Iraq. You don't know who is protecting your investment. My message to anybody who wants to come and invest in Iraq is hold on, don’t jump until somebody can get their act together,” Al Dahwi said.

And he warned that the new Iraqi telecommuncation law which is being addressed by the United Nations Development Programme in Amman in two days time will lead to the “nationalisation of telecommunications”.

“It is so confusing. There is no commission. The ministry of telecommunication handles everything, so the whole shooting match comes under their control; gateways will be under their control, international gateways will be under their control, data has to go through them, and there will be nationalisation of the internet. It’s scary stuff. It’s going back even behind Russia under Stalin.”

Last week, Iraq’s three mobile operators were fined just over US$20 million by the ministry for providing a “bad service”, according to a government spokesman.

Zain Iraq and Asiacell both claim that jamming devices used by security services to prevent roadside bombs are responsible for network interference.