“The future of ICT in Iraq will play a very effective role”

Tawfiq Allawi
Iraqi Minister of Communication

The political instability and war situation severely disrupted telecommunication services throughout Iraq, including international connections. Over the last few years, the country is undergoing a whole new beginning towards developing ICT Infrastructure and services.

The country is Iraq is aiming to encourage an increased role for the private sector in telecommunication sector under the leadership of H.E.

Mohammed Tawfiq Allawi, Minister of Communication of Iraq. Carrying an extensive experience of public infrastructure development, social service and Telecommunication administration, the Minister of Communications vows to increase capacity and connectivity both at domestic and International level.

Teletimes International had a chance to meet the honourable Minister during Telecoms World Middle East Conference at Dubai recently. We also got an opportunity to arrange an exclusive interview with H.E. Mohammed Tawfiq Allawi, hereby presented to our readers.

Khalid Athar – Minister Tawfiq, kindly tell us the role, scope, responsibilities and functions of Ministry of Communications of Iraq?

Tawfiq Allawi – Before 2003 the Ministry of Communications held a monopoly over fixed telephone lines and postal services, there were only a few hundred internet connections, and there was no mobile network nor any communications regulator.

After 2003 the Ministry expanded its services to provide infrastructure for all types of connectivity, including mobile telephones and broadband internet, and next year will itself will have a stake in a mobile network company.

The Ministry of Communications has three state companies, one responsible for infrastructure and voice communications, the second for data, and the third is charged with communications security.

However the state monopoly is receding with the private sector playing a very effective role in providing mobile telephone services, WLL and internet services.  Additionally many projects are now joint public-private partnerships  with the Ministry charged with providing the necessary infrastructure; such partnerships have and are taking place for fixed telephone services, broadband services (both wirelessly and through FTTH, Fibre-To-The-Home), postal delivery services and there are also plans to make the post office network a joint public-private partnership.

KA – What is the present telecommunication and postal policies framework in the country?

TA – Our long term policy for telecommunications and postal services is eventual privatisation through gradual phases to allow growth of the private sector so as to absorb public sector employment.

Breaking this down, our first phase policy for the communications sector is to broadly push for public-private partnerships, with the subsequent phase ensuring that state and jointly-owned companies are profitable, this will be combined with listing the companies on the Iraqi Stock Exchange to allow the public to participate in their success.  To a large extent profitability depends on good management, the right use of marketing and efficiency, and for this we will be seeking strategic partners in the private sector.

KA – Demand for telecom services, mobile telephony and Internet is growing fast. Sir, which major actions are being undertaken by you to help develop and modernize the telecom infrastructure in Iraq?

TA – Before 2003, Iraq’s communications infrastructure lay almost completely demolished, including 150 Ministry of Communications buildings that were damaged, for Iraq had been badly hit by the three wars and over a decade of sanctions which prevented infrastructure rehabilitation.

Over the last eight years however the infrastructure has been developing rapidly.  Already we have rehabilitated and laid around 12,000km of fibre optic cables with DWDM technology and are expecting to cover 20,000 km by 2012 and have set  up two microwave routes in the country (north to south, and middle to west).  We are currently increasing capacity and connectivity to neighbouring countries including Turkey, Iran, Syria, Jordan, Saudi Arabia, Kuwait and to the Gulf through submarine cables.

KA – Would you share the present market status for fixed-line, mobile telephony and Internet in Iraq?

TA – We have almost 2 million fixed lines of which 750,000 are NGN (Next Generation Networks) and have signed agreements which will see this increase to 4 million lines by the end of 2012.  The connectivity between switches and end users is very old and in a bad state, but we are in the process of installing 300,000 FTTH connections which will be completed in a few months, and have partnered with the private sector to install 1.8 million FTTH connections during 2012 and a further 1.8 million throughout 2013.

As regards the mobile phone market, we have three private operators with approximately 23 million subscribers – representing a penetration rate of more than 75%.  The Ministry of Communications will also be entering into a public-private partnership for the fourth mobile licence which will using LTE technology, also known as 4G technology.

The internet penetration rate remains at a low 5%, and our plan is to increase it to 30% within three years by increasing the number of FTTH connections and wirelessly through LTE technology.

KA – How are you focusing to attract investment in the telecommunication and postal sector? Is there any open invitation extended to interested parties?

TA – To attract the necessary private sector investment, we recognise that we must move away from the typical state-run model – that can afford to be loss-making – and move towards making projects profitable even before the private sector has invested, and then to gradually encourage increased private sector investment and ownership.  Without the private sector it is difficult to develop the sector to the best levels.  As an example, to reach our target FTTH penetration rate of 20-25% will require $3.5 billion, of which the Ministry of Communications will contribute $1 billion over five years; the remainder is based on investments from the private sector.

Another example is that for postal sector, we have around 380 offices, and looking for further 1000 postal agencies to be established around country and are looking for strategic partner.

Of course the invitation for investment in the sector is extended to all, and we look for parties that can demonstrate the right level of technical and financial capability, as well as management expertise.

KA – Are you looking forward to attract Venture Capitalists to Iraq especially in IT businesses?

TA – Private equity is important towards ensuring that Iraqi companies can establish themselves in this developing sector, and venture capital will of course play a key role.  As yet there is an interest to invest in Iraq by a handful of private equity firms, with some having made progress and invested in the telecommunications sector, and interest lying principally in the mobile phone network companies.  We expect increased interest of private equity firms in Iraq’s communications sector as we implement our policy of gradually moving the sector towards privatisation.

KA – What cross-cutting benefits ICT have produced for people of Iraq?

TA – The development of communication networks and infrastructure has brought mobile telephone networks and increased access to internet and broadband speeds for personal and business users.  Additionally ICT is being increasingly relied upon by the Iraqi government with telemedicine being introduced to support healthcare workers, education institutes starting to provide e-learning, and additionally financial institutions have started to provide e-banking for the public.

KA – How do you envisage future ICT development in your country and the likely contribution it can play in economic and social development?

TA – The future of ICT in Iraq will play a very effective role which will increase as broadband penetration rate increases, and will increase Iraq’s GDP by opening up new sectors and making it easier for businesses to succeed (for example through e-shopping) while delivering consumers with increased access to goods and services (for example accessing bank accounts online).  Likewise, as mentioned earlier e-learning will increase students’ access to educational resources, including journals and papers and will enable communication with other educational institutes across the world, and telemedicine will enable healthcare providers to seek the opinions of specialists across the world.

KA – Iraq is likely to join the World Trade Organization; we observed some discussions during the course of this year as well. How will this impact Iraq’s telecommunications sector?

TA – Iraq is already taking steps to ensure that it will be WTO compliant in the communications sector as membership to the WTO will allow for increased use of Iraq’s communications infrastructure that will support Iraq’s role as a key communications hub for the region, will allow for increased access to other markets stimulating economic growth and ultimately will enhance technical cooperation between Iraq and other member countries allowing Iraq to develop the sector more rapidly.

KA – How important is regional cooperation for infrastructure and development? Are you looking to build such cooperation?

TA – Sitting between Asia and Europe – through Turkey, and between the Gulf and the Mediterranean – through both Syria and Turkey, Iraq – from a communications perspective – is strategically located.  Already there are several communications projects underway which rely on its geographic position, such as SAIT (Saudi Arabia, Iraq and Turkey), GIT (Gulf, Iraq, Turkey), and in 2012 Iraq will connect to further high capacity submarine connections such as FLAG, GBI (Gulf Bridge International) and TATA, and all these lines will have backup connections through Iraq, and Turkey towards Europe, in addition to existing connectivity through the Red Sea and Suez Canal onwards to the US.

Our cooperation already extends to all neighbouring and most regional countries including Saudi Arabia, Bahrain, Kuwait, Qatar, Iran, Jordan, Turkey and Syria.

KA – Wireless broadband technologies have arrived with some promising additions to economies especially as a perfect alternative to fixed infrastructure. How your ministry does plans to reveal this opportunity to people of Iraq?

TA – Currently we are providing wireless broadband services through wide area coverage Wifi and we have a major project, the WBB (Wireless Broadband) to support e-government.  Furthermore wireless broadband in Iraq is also available over CDMA using the EVDO standard, and our plan for 2012 is to provide wireless broadband over LTE technology.

KA – What would be your final message to our readers; supposing they are international investors looking for new opportunities?

TA – Iraq becoming a free market economy in 2003 has presented immense opportunities both for investors and for telecoms companies. Although currently the GDP per capita stands at around $3000, this is projected to rise fourfold over the coming six years, as oil production which is now around 2.9 million barrels per day is estimated to reach 12 million barrels per day in 6-8 years which will dramatically increase country revenues. The increased use and reliance on telecommunications presents major investment opportunities especially in mobile telephony, fixed telephone networks, wired and wireless broadband, and also support for e-government, e-health and e-learning (for example we are now undertaking a project to provide 1 million laptops for students). Likewise as we overhaul Iraq’s postal services, major investment opportunities will arise – for example we are currently looking to set up around 1000 postal offices over the country.

Finally, Iraq’s transit infrastructure is fast making it a hub for international cables, that will host servers and make it a key strategic communications player in the region.

KA – Would you like to comment on Teletimes International, that is the only tri-regional magazine focused towards the ICT and Telecom sectors of the Middle East, Asia and Africa?

TA – I would like to congratulate you on covering this sector and undoubtedly Teletimes International plays an important role in allowing professionals from the sector to keep up-to-date with communications developments in the region.

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