Iraq's 4th mobile licence to cost $1-2 bln -minister

Mon Mar 14, 2011 8:58am EDT

* 4th mobile phone licence, infrastructure to cost $1-2 bln

* New licence would give Iraq better technology

By Serena Chaudhry

BAGHDAD, March 14 (Reuters) - Iraq's communications minister said he expected the country's planned fourth mobile phone operator licence to fetch between $1 billion to $2 billion in a possible auction by the end of this year.

Mohammed Allawi, who took over the communications portfolio in December, said the expected cost for the licence, including installations and infrastructure costs, could be from $1 to $2 billion, correcting an earlier statement he made on Wednesday.

"The infrastructure and the licence fees. Both (will be) between $1-2 billion. This is an estimated figure," Allawi told Reuters on Monday.

Allawi said on Wednesday Iraq hoped to auction a fourth mobile phone operator licence by the end of 2011. Forty percent of the licence would go to an operator, 35 percent to the public and 25 percent to the Communications Ministry. [ID:nKAM949034] Iraq's mobile phone market, which did not exist under Saddam Hussein, has mushroomed since the 2003 U.S.-led invasion that toppled him.

The country held an auction in 2007 in which Kuwait's Zain (ZAIN.KW), AsiaCell and Korek Telecom -- based in the northern Kurdish area -- bought 15-year licences for $1.25 billion each.

Allawi said he welcomed Monday's news about a deal in which France Telecom FTE.PA and Kuwaiti logistics group Agility (AGLT.KW) will buy a 44 percent stake in Korek, but said this did not detract from the need for a fourth mobile phone operator in Iraq. [ID:nLDE72D042]

"France Telecom is going to expand Korek, give it more cover," he said. "Regarding the fourth licence, the most important thing about it is that we are going for more advanced technology. Until this moment, we have no 3G in Iraq, we have no 4G. We have only GSM."

Eight years after the U.S. invasion, Iraq's infrastructure is still badly battered and landline and internet penetration remain low.

Third-generation (3G) technology would allow data-hungry consumers to surf the internet and download music to handsets quickly on the go. (Editing by Rania El Gamal; Editing by Jon Loades-Carter)