Executive summary
The main story of telecommunications in Iraq continues to be mobile. Before the Iraq war of 2003 mobile telecoms did not exist in most of Iraq outside the Kurdish areas. In the six years since the launch of services in 2004, subscriber numbers have exploded to reach penetration levels higher than in neighbouring Syria or in Lebanon, at over 60%.
Four operators share the market but Zain of Kuwait’s subsidiary Zain Iraq has much the largest market share, with well over 50% of the market. Asiacell, which has Qtel of Qatar as a major shareholder, has just over a third of the market. Two small operators based in the Kurdish part of Iraq have the remainder, one of which, Korek, has a national licence but has yet to extend its reach much beyond the region.
Part of the reason for the booming mobile sector is the lack of any significant fixed-line market, with infrastructure almost non-existent outside of Baghdad. Fixed-line penetration levels are less than 5%. There is also a great lack of fibre-optic backbone infrastructure, both nationally and for international connections.
Several Wireless Local Loop licences have been awarded and operators have launched services using CDMA networks but they have not as yet made much impact.
Inevitably these factors have led to very low levels of Internet subscribers. There are no reliable statistics for the numbers of Internet users. Most users access the Internet at Internet cafes with satellite connections. With better backbone infrastructure mobile Internet services could probably be successful but as yet 3G/HSPA services are not available.
Uncertainties exist in the regulatory situation with several disputes existing between the Ministry of Communications and the mobile operators. The Ministry has claimed it is owed large sums by the operators and has also fined them substantial amounts for non-fulfilment of service conditions in their contracts. The operators in turn have complained about the lack of consultation on a draft new Communications Law and also that they are being unfairly blamed for the high cost of fixed to mobile calls.
Despite inevitable problems, the telecoms sector is one of the big success stories of post-war Iraq. With a more settled security situation and better regulation and a liberalised market, the much-needed investment and development will surely follow.