The Telegraph
Since 1st March, 1999
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US means Iraq business
- Mobile phone licence blow to Arab companies

Baghdad, July 31 (Reuters): Iraq’s US-led authority has barred partly state-owned companies from bidding for three mobile phone licences, a move critics say could give US firms an upper hand over Arab companies.

The US-led Coalition Provisional Authority (CPA) is holding a tender conference in Amman for the three Iraqi mobile phone licences, among potentially the most lucrative contracts to be offered in Iraq.

“No government shall directly or indirectly own more than five per cent of any single bidding company or single company in the consortia,” tender documents posted on the CPA web site say.

The move could bar Arab firms such as Batelco, which briefly offered post-war mobile service in Baghdad and is partly owned by the Bahraini government, from bidding. It is common for Arab governments to hold stakes in Arab firms.

“It seems that none of the companies in West Asia will be able to bid in these conditions,” Batelco regional operations manager Rashid al-Snan said. “I am sure there will be a number of companies opposing this.”

Mobile phones were banned under ousted President Saddam Hussein, but sprang unexpectedly to life in Baghdad last week, delighting cellphone users.

Mobiles quickly replaced expensive satellite telephones as a major means of communicating abroad — at least for foreign journalists and businessmen. Few Iraqis have suitable phones.

But heavy US pressure forced Batelco to pull the plug on its $5 million network in Baghdad just days after starting service, ending the capital’s first foray with mobile phones.

Batelco said it planned to invest $50 million in Iraq. A spokeswoman said the firm still planned to submit a bid as a joint-venture with an Iraqi company.

Kuwait’s MTC-Vodafone, whose roaming service had also briefly worked in Baghdad and which has said it wants to participate in the tender, is 25 per cent government-owned.

The government also has a stake in Kuwaiti rival Wataniya Telecom, which wants to take part in the tender as well. A CPA spokesman, asked about the five-per cent rule, said it was “one of the things we are prepared to look at again”, but gave no further details.

The CPA said it expected the two-year regional licences would ultimately be renewed by an eventual Iraqi government, and would turn into competing national networks after a year.

“It is likely that the licences awarded... will be continued by the new permanent Iraqi government,” the documents said. “The process is expected to lead to three competing national mobile networks.”

But the CPA spokesman said he did not see the networks up and running until mid-November, back-tracking on previous CPA assertions that mobile phone service could come to Baghdad in “weeks rather than months”.

Reward approved

US secretary of state Colin Powell has approved a $30 million reward to the person who led US forces to Saddam’s sons Uday and Qusay, the state department said today. Spokesman Richard Boucher said the reward, $15 million for each of the two men, would be the largest ever paid by the US under its rewards for justice programme.

He declined to name the recipient but media reports have said he is Nawaf al-Zeidane, the businessman in whose house the sons took refuge.

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