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Iraq Plays Global Game

Light Reading
LR Mobile News Analysis
Light Reading
10/24/2003

The Iraqi Communications Ministry may have opted to award cellular network licenses based on the European-backed GSM wireless standard, but it’s a truly global set of infrastructure vendors securing the contract deals on offer.

Earlier this month two-year licenses were awarded to Egypt’s Orascom Telecom; a partnership between Kurdish communications company Asia Cell and Kuwait’s National Mobile Telecommunications (NMT); and a consortium including Kuwait’s Mobile Telecommunications Co. (MTC) and Atheer Tel of Saudi Arabia (see GSM Wins Iraq Battle).

Despite analysts' previous belief that European vendors appeared well placed to win the majority of contracts, U.S.-based Motorola Inc. (NYSE: MOT) has stolen a march on its rivals by already wrapping up two lucrative deals.

In a statement today the vendor claims to have been selected as the “main supplier” for Orascom’s network, serving the most densely populated Central region, including capital city Baghdad, in a deal worth up to $40 million (see Motorola Supplies Iraqi GSM).

The win will come as a surprise to analysts, many of whom were not expecting Motorola to figure in Orascom’s Iraqi plans. “Alcatel and Siemens appear to have the closest relationship with Orascom,” wrote Stuart Jeffrey of Lehman Brothers at the time of the license awards. “Both vendors signed a global frame agreement for the global supply of end-to-end solutions to Orascom and all its subsidiaries in July this year.”

Kuwait’s MTC has also stated that Motorola will be the main supplier for its $120 million network in Southern Iraq, building on a relationship dating back to 1994.

The third license -- owned by NMT and AsiaCell and covering the Northern region of the country -- is to be split into two separate contracts. Germany’s Siemens is to provide equipment for the western part of the network, while China’s Huawei Technologies Co. Ltd. will supply kit in the eastern half of northern Iraq.

According to Reuters, the list of potential suppliers for the western half had been narrowed down to either Siemens, Finland’s Nokia Corp. (NYSE: NOK), or Sweden’s LM Ericsson (Nasdaq: ERICY).

“It was a tough call but we finally decided on Siemens as they had worked with us in the bidding process,” David Murray, NMT’s CEO, told the news agency.

French vendor Alcatel has also won a slice of the network pie, today confirming its status as a supplier to Orascom alongside Motorola. “We are providing the key switching center technology and intelligent networking platforms for the carrier,” spokesman Mark Burnworth tells Unstrung.

— Justin Springham, Senior Editor, Europe, Unstrung

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