In a blow to many U.S. firms vying for the business, the new Iraqi networks will be based on the GSM standard commonly used in the Middle East and Europe. U.S. companies such as MCI, Motorola, Sprint, Oracle and San Diego-based Qualcomm had watched the bidding process closely even though the U.S. uses a rival technology known as CDMA. U.S. firms could still play a role as suppliers.
One of the losing U.S. bidders, which had promised to sell half its stock to Iraqi investors, expressed disappointment Monday that the council selected large telecommunications companies from other Arab nations.
"This is sending the message that Iraq is the big fat cow for everyone but Iraqis to milk," said Asaad Alnajjar, chief strategy officer for Zagil Wireless, a consortium founded by a group of Iraqi Americans at VoEx Inc., based in Grand Rapids, Mich., and Zagil Integrated Telecom, based in Silicon Valley.
Security will be a challenge for the winners, who will be responsible for protecting their own towers and equipment.
Just as oil pipelines and transmission towers have been attacked, cellular networks could face sabotage. During a July telecommunications conference in Jordan, an Iraqi businessman threatened to attack towers if his group's bid was not accepted, a meeting participant said.
