Iraq has moved a step closer to its first nationwide wireless internet network, with the signing of Dh1.01 billion infrastructure agreement.
Kalimat, the Kuwait-based consortium awarded Iraq's first wireless licence in September 2006, signed the deal with China's Huawei Technologies for the latter to build out the infrastructure in four phases. The first will begin in September.
Building a countrywide fibre network to carry broadband would be prohibitively expensive, so Iraq will instead rely on wireless and Wimax.
Kalimat anticipates investing DhDh3.67bn over a 20year period.
The network will be completed by September 2008.
"This is the right time to be going into Iraq - you won't find a better niche market anywhere in the world," said Wilson Varghese, Kalimat's Chief Executive.
Kalimat claim there are more than 25 million potential subscribers in Iraq, with the company expecting to sign up four million of these in the first two years.This will equate to 28 per cent penetration, while the current figure is just four per cent.
Varghese is adamant the dire security situation in Iraq will not prohibit or delay the deployment of the wireless network.
He said: "This will be done through sub contractors at the local governor level and we will be deploying in a continuous phase.
"Most of the locations will be maintained by Iraqis themselves, so we will bring more people into work." Kalimat will not have a monopoly. As first entrant into the market, Kalimat will pay 28 per cent of revenues to the Iraqi Government, while the second player will be required to pay 35 per cent royalties.
Varghese anticipates Iraq will have 12 million subscribers within four years, with Kalimat claiming a 60 to 80 per cent market share.
He said the development of broadband services would help to ease the ongoing insurgency. "We will employ 2,000 Iraqis, said Varghese.
"By providing communication networks we will help businesses to thrive, which will create more job opportunities and help bring stability to rebuild the economy.
"The industries will develop once a communications network is in place," he said.
Estimates suggest Iraqis spend 25 to 50 per cent of their income on mobile phones because family members regularly phone each other to find out if every one is safe.
By Matt Smith
© Emirates Today 2007
