WASHINGTON-The Coalition Provisional Authority may revisit a ban against government-owned telecommunications companies from winning a wireless license in Iraq, said a top military official on Friday afternoon.
“This is what the CPA needs to work out. That will be a factor in their thinking. If they do make any adjustments, it would be posted on their Web site,” said Linton Wells II, deputy to the assistant Defense secretary for networks and information integration, responding to a question regarding whether government-owned telcos could participate in some fashion. “We have gotten some additional feedback.”
The CPA held a bidders conference Thursday in Amman, Jordan. “The bidders conference by all accounts was quite an active event,” said Wells, noting that more than 400 people participated.
Bids are due by 10 a.m. on Aug. 14.
Prior to the conference, the international press reported that many prospective bidders would not be eligible because they were more than 5-percent government owned. Most wireless carriers in the Middle East are at least partially government-owned. Governments also have significant interests in T-Mobile International AG and Orange plc, two of Europe’s biggest carriers. Orange is owned in part by the French government and T-Mobile by the German government.
Another government-owned telecom carrier, the Bahrain Telecommunications Co., also appears to be prohibited from obtaining a license even though Batelco Iraq, which has a 30-percent Iraqi investment, has set up a network and briefly offered GSM service last month. The CPA ordered Batelco to shut down its network because it was operating without a license.
Wells disputed the notion that the government-ownership restriction would tilt the bidding process to American companies’ advantage.
“I think we feel that having a significant share of Iraq’s telecommunications system owned by a company that may have foreign-government ownership is not necessarily in the best interest of the Iraqi people. At the same time we feel that a teaming, consortia or various kinds of arrangements that might have bidders including those that have government-ownership will be able to compete within the guidelines,” said Wells. “People have characterized this as, `Oh my God! This absolutely excludes Middle Eastern telecommunications companies with a large government presence.’ It doesn’t do that at all. They could be part of consortia, teams or bidding groups.”
The CPA expects to award three regional licenses in the in September. According to bidding information available at cpa-iraq.org, licensees will have 20 days to turn on service. Service is not considered `on’ until 95 percent of the calls in both directions go through. Bidders will outline how they will meet specific benchmarks, which will become part of the conditions of the license. The licenses cannot be sold or expanded nationwide until the 12-month benchmarks are met.
Bidders may apply to use GSM, CDMA or third-generation technology, but must show how they will facilitate roaming within Iraq with other regional licensees and with other Middle Eastern carriers. No carrier in the Middle East uses CDMA technology.
“The key point is that it will be technologically neutral. It is absolutely intended, and we spent a lot of time working to ensure that there is equal opportunity for GSM, CDMA, or in the future UMTS. You have equal opportunity to compete. The criteria for this decision will be the best value for the Iraqi people,” said Wells.
While Wells said that 911 service was a priority, he acknowledged that bidders are not being required to deploy wireless enhanced 911-location technology.
The only company authorized to offer mobile-phone service is the MCI division of bankrupt WorldCom Inc. MCI received authority from the Department of Defense to operate a mobile-phone network. Wells said the Defense Department does not believe that a GSA ban of WorldCom/MCI from future government contracts would impact its relationship with the bankrupt carrier.
MTC-Vodafone is operating in Basra at the behest of the British military, which controls that southern city. Kurdtel is operating a holdover network in the Kurdish area in northern Iraq.
Other areas of Iraq did not previously have mobile-phone service.
