WASHINGTON-The U.S.-led occupational force in Iraq will seek bids for three regional mobile-phone licenses in the war-ravaged nation, but growing security problems could undermine wireless and other telecom reconstruction efforts.
The Coalition Provisional Authority, led by L. Paul Bremer, said it would issue a request for proposals the week of July 28. Proposals will be due two weeks later. Once the RFP is released, the CPA will hold a conference to provide greater detail about the licensing process. One option on the table is holding a meeting July 31 in Amman, Jordan.
The CPA is requiring each applicant to bid on at least two of the three regional licenses covering northern, central and southern regions in Iraq. The three regions encompass the country’s key population centers, totaling 17 million people. The RFP will outline conditions, which if met, will enable regional licensees eventually to provide full nationwide coverage in Iraq.
“This is an important step toward establishment of a telecommunications infrastructure vital to Iraq’s reconstruction and redevelopment,” said Norm Sandler, director of strategic global issues at Motorola Inc. “Motorola has extensive experience as an equipment supplier to network operators in the region and will look with interest at any opportunities this may create to expand our involvement in that part of the world.”
In June, Motorola won a $16 million contract to supply Baghdad police with trunked two-way radios.
Iraq is on the radar screen of U.S. wireless operators, too.
“I think we’re going to look at that opportunity,” Paul Saleh, chief financial officer of Nextel Communications Inc., told Bloomberg TV last Thursday. Saleh said the walkie-talkie feature on Nextel phones could prove valuable in Iraq.
While hundreds of millions of dollars in contracts are up for grabs in Iraq and surrounding countries if the United States is successful in exporting democracy to the volatile region, it remains to be seen whether business interest in Iraq will come to match the frenzy associated with Iraq reconstruction since the fall of Saddam Hussein’s regime two months ago.
Iraq remains a dangerous place. Guerilla warfare has taken hold. American and British soldiers are being killed, despite the presence of U.S and British troops and Iraqi security forces. In releasing its second-quarter results, Motorola listed as a business risk “the continuing hostilities in Iraq and increased conflict in other countries.”
The Bush administration has informed wireless applicants they will be responsible for the security of their people and transmission facilities.
It is unclear whether existing mobile-phone service providers in Iraq will have a leg up on the competition. To some degree, the three regions in Iraq are already spoken for.
Indeed, Kuwait’s MTC Vodafone operates a 900 MHz GSM system in southern Iraq. WorldCom Inc., despite growing criticism about its government contracts, was picked by the Pentagon to serve the capital of Baghdad in central Iraq with a GSM wireless system. The MTC and WorldCom mobile-phone systems support military, government and humanitarian activities. To the north, the Kurds operate a GSM system.
It is believed that all three wireless network providers will be allowed to apply for regional mobile-phone licenses or at least possibly co-exist with future wireless licensees.
The CPA said there would be no restrictions on technology. The CPA said license conditions and interconnection and technical requirements will be spelled out in the RFP.
The Bush administration is taking great pains to avoid the GSM-CDMA technology war, standing firm on its policy of technological neutrality.
On Friday, the CPA said Iraqi mobile-phone systems would operate on the 900 MHz band. The CPA said applicants for licenses will be selected based on the following criteria: coverage of population centers and communications routes, financial health and technical expertise of bidders, wireless experience in the Middle East and compatibility of planned wireless systems with commercial, business and social needs of the Iraqi people.
Applicants will to have to pay a licensee fee to help underwrite the cost of Iraq’s Ministry of Transportation and Communications.
One aspect of the tender is bound to get close attention and could even influence business interest in the wireless solicitation. The license term is limited to two years. That adds a level of uncertainty that could weigh heavy on prospective investors.
Left unclear is the status of licenses once the CPA hands off the government to the Iraqi people. A new governing council comprised of different religious and ethnic factions in Iraq was recently established, though Bremer’s CPA still has the final word on all matters.
The CPA said parties interested in applying for Iraqi mobile-phone permits should contact authorities as mobile_auction@orha.centcom.mil.
