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US Refutes Iraq GSM Report

The U.S.-led Coalition Provisional Authority (CPA) has denied a Financial Times report stating that the award of three GSM licenses in post-conflict Iraq has been put on hold due to allegations that the bidding process was “hijacked by associates of the new Iraqi governing council.”

Last month the Iraqi Communications Ministry granted two-year licenses 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).

The newspaper report suggested that the CPA has been advised to postpone signing the contracts, with its lawyers recommending a 10-day delay to permit investigations into “claims of cronyism by the Iraqi authorities in awarding the licences.”

The report added that the finger of suspicion was pointed at the role of Nadhmi Auchi, the Iraqi-born billionaire businessman involved in the Orascom group. No further details were disclosed.

The CPA’s senior press advisor, James M. Smith, today told Unstrung that the article was inaccurate, refuting any notion of bad practice.

A Reuters report also quotes Charles Heatly, spokesman for the CPA, stating that “the CPA does not require, has not requested, and is not carrying out further investigations into the winning companies and their investors.”

The denial will be welcome to cash-strapped vendors attempting to secure the network contract deals on offer (see Iraq Plays Global Game).

An Orascom conflict in particular would have had significant impact on suppliers Motorola Inc. (NYSE: MOT) and Alcatel SA (NYSE: ALA; Paris: CGEP:PA).

— Justin Springham, Senior Editor, Europe, Unstrung
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