BAGHDAD — Three Arab-owned telecommunications consortiums won coveted licenses Monday to launch wireless service in Iraq as early as this month. However, initial pricing may make cells phones an unaffordable luxury for most Iraqis, many of whom have been without basic telephone service since the war began.
No U.S. companies were among the winners, who will spend a total of more than $250 million to build mobile networks throughout the country.
The licenses represent one of the biggest private-sector foreign investment deals since President Bush declared major combat over in May. They were awarded as U.S. and Iraqi officials struggled to attract businesses from around the world to participate in reconstruction. The country's cell phone market is expected to generate as much as $1 billion in revenue over the next five years.
"This is an impressive demonstration of belief by the international business community in the future of Iraq and its prospects for building a robust economy," said Haider Ebadi, Iraq's communications minister.
Under terms set by the U.S.-led Coalition Provisional Authority, or CPA, licenses were awarded in three parts of the country. Cairo-based Orascom won the license for Baghdad and surrounding areas; Asia Cell, a consortium including Kurdish-owned Asia Telecom and Kuwaiti-based Wataniya Telecom, will serve the north; and AtheerTel, a Kuwaiti-dominated partnership including Mobile Telecommunications Co. of Kuwait, received the license for the city of Basra and the south.
The winners are required to set up their territories within 12 months, but will probably finish earlier because of the demand. Then they will be permitted to expand nationwide in competition with one another.
"The race is now on," Ebadi said.
Announcement of the awards, originally expected by early last month, was delayed as officials sorted through 100 bids by 35 groups. The CPA also provided extra time for Ebadi, appointed last month, to review the choices.
Though CPA officials said they would not give preference to bids by Iraqis or Iraqi-based companies, each of the winners agreed to sell between 10% and 50% of their local operations to Iraqis, Ebadi said.
Prices have not been set, but phones are expected to start at about $50 and calls will cost 8 to 10 cents a minute, Ebadi said.
In a bustling Baghdad shopping district on Monday, merchants and consumers said they eagerly awaited cellular service, but fretted over the cost.
