07/31 - Bids open for wireless service in Iraq - East Valley Tribune: Business

07/31 - Bids open for wireless service in Iraq

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Posted: Thursday, July 31, 2003 11:42 am

AMMAN, Jordan - Iraq's U.S.-led administration began seeking bids Thursday for three wireless phone networks to serve the war-ravaged country, where the landline phone system is in shambles and temporary cellular service is available only for military, government and aid officials.

Some 425 businessmen representing 300 international companies attended a conference Thursday in Amman to discuss the contracts being sought for the mobile phone networks, which are expected to be operating by the end of the year.

"Iraq needs a telecommunications system and it needs it now," said Jim Davies, a member of the Coalition Provisional Authority who is advising Iraq's Ministry of Transportation and Communications. Another official with the ministry, David Leech, said the project should cost between $80 million and $200 million, depending on subscriber numbers.

Abdul Latif, director of Iraq's state-run General Company for Post and Communications, said Saddam Hussein's regime installed the infrastructure for a wireless network, including towers and fiber-optic lines. But the network could not be developed because of the lack of imported telecommunications equipment under U.N. sanctions imposed in 1990, he said.

"Iraq is a big and competitive market now," Latif said. He estimated that Iraq needs around 2 million mobile phones by early next year.

Darrell Trent, senior adviser to the Communications Ministry, said the bidders could use the "substantial assets" in place in Iraq, including the wireless network's towers.

But security remains a problem in Iraq, he acknowledged.

"We're confident that as we go along and as the economy picks up that things will stabilize," Trent said. "It's difficult to speculate on how long and when."

A group of 60 Iraqi businessmen used the conference to announce the formation of a consortium, the Iraqi Telecommunications Co., that they hope will be involved in the wireless project.

"We don't want a foreign company to have complete monopoly over the Iraqi market," said one member, Musaab al-Windawi.

Earlier this summer, Bahrain's telephone company, known as Batelco, spent $5 million setting up a wireless network in Baghdad without the permission of the U.S.-led occupation authority. The company began carrying calls for people whose phones use the GSM network standard common in the Middle East and Europe and planned to give free phones to police and emergency crews.

But last week, Batelco ceased its service under orders from the coalition authority, which claimed the network was interfering with a temporary, Pentagon-funded system installed in Baghdad by WorldCom Inc.'s MCI division. Other than that service and Kurdish networks in the northern enclaves, Iraq also has a temporary network in the south set up by MTC-Vodafone, a Kuwaiti-British partnership.

The coalition administration is accepting bids for the mobile phone licenses until Aug. 14, with three companies to be chosen Sept. 5 - one each for Iraq's north, center and south. Installation is to start Sept. 25.

Winning bidders will have to put up a $30 million bond, Davies said. The wireless licenses are to last just two years, forcing the network operators to hope for a renewal afterward.

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