Mobile phone contracts in Iraq to be based on GSM standard

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October 06, 2003 (Computerworld) -- The U.S.-backed governing authority in Iraq awarded three mobile phone licenses today to companies based in the Middle East, all of which plan to build networks based on European standards, and not a U.S.-developed standard.
In March, U.S. Rep. Darrell Issa (R-Calif.) sent letters to Secretary of Defense Donald Rumsfeld and the U.S. Agency for International Development urging deployment of mobile phone systems in Iraq based on the U.S.-developed Code Division Multiple Access (CDMA) technology and not the European Global System for Mobile Communications (GSM) standard (see story). San Diego-based Qualcomm Inc., which developed the CDMA standard, is headquartered in Issa's district.
The Coalition Provisional Authority (CPA), the U.S.-led body overseeing Iraq, awarded licenses to carriers that intend to use GSM in their respective geographic areas -- northern, central (including Baghdad) and southern Iraq.
Under Saddam Hussein, Iraqis weren't allowed to use mobile phones, said Haidar Jawad al-Abadi, the Iraqi minister of Transport and Communications. Al-Abadi said he views the awarding of the licenses as a move into a new age of telecommunications for the country.
"It's time Iraq caught up with the rest of the world after it was isolated politically, economically and technically for very long," al-Abadi said in a statement. "Until now, we were denied mobile phones. Iraqis will welcome the chance to use mobile phones to talk to their family, friends and for business purposes," he said.
Craig Ehrlich, chairman of the GSM Association, a global trade organization in London, said in a statement that the "GSM will help re-integrate Iraq internally, with its neighbors, the region and the rest of the world."
Ian Volans, an association spokesman, said using the GSM standard would make it easier to integrate the Iraqi mobile network with those of surrounding countries, since "every Arab country uses GSM."
Frederick Hill, a spokesman for Issa, said he didn't know if the congressman would have a comment on the choice of GSM for Iraq. He said Issa was focused on the California gubernatorial recall campaign.
A representative of Qualcomm didn't immediately return phone calls for comment. The CPA didn't disclose dollar amounts for the contracts.
Roger Entner, an analyst at The Yankee Group in Boston, estimated that the winning bidders would need to invest a total of $100 million to build networks that could provide "bare-bones" coverage of Iraq, while a more comprehensive network could cost $1 billion. The CPA will also require the licensees to post performance bonds of $30 million each.
According to the GSM Association, the service areas and winning bidders are:
Northern Iraq
Asia Cell Telecommunications Co.
Investors: Asia Cell Co., Wataniya Telecom, United Gulf Bank
Central Iraq and Baghdad
Orascom Telecom Iraq Corp.
Investors: Orascom Telecom Holdings SAE in Cairo, Alaa El Khawaja and Allied SA Ltd.
Southern Iraq
Atheer Telecom Iraq
Investors: Mobile Telecommunications Corp. in Kuwait, Dijla Telecommunications Corp. and Kharafi National in Kuwait

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