Kurdish firm aims to launch $100 mln Iraq broadband route in 2015

DUBAI, April 1 (Reuters) - A Kurdish Internet company expects to open a long-delayed $100 million broadband cable running from Turkey to Iraq’s Gulf coast by the end of 2015, after spending an extra $30 million to replace lines and equipment overrun by Islamic State.

IQ Networks, a wholesale Internet provider based in the northern autonomous region of Kurdistan, aims to carry international traffic through Iraq to link Asia and Europe, boosting Iraq’s hopes of becoming an international hub for Internet traffic despite the country’s internal chaos.

Iraq relies heavily on Kurdistan for Internet connectivity after Baghdad’s insistence on state control of fixed infrastructure within its jurisdiction stifled development and spooked private investors. The government also segregates networks carrying transit and locally-destined traffic.

“This will be the first privately built and privately run network of this kind outside of Kurdistan,” said Martin Frank, chief executive of IQ Networks.

Under a deal with Baghdad, IQ Networks be granted a 15-year renewable licence to operate the network but will hand ownership of the cable outside of Kurdistan to state-owned Iraq Telecommunications and Post Company (ITPC) and will pay 26 percent of all revenue to the government.

IQ Networks began in 2010 to build the transit-only fibre network connecting Iraq with Turkey, Iran, Kuwait, Saudi Arabia and Syria, plus submarine cables landing near Basra on Iraq’s Gulf coast.

The project has faced numerous hurdles. It was cancelled in 2011 and awarded to another company before that decision was reversed in 2013, Frank said.

The network follows Iraq’s main oil and gas pipeline. It was nearing launch weeks before Islamic State’s sudden surge last June enabled it to capture much of western and northern Iraq - areas through which the cable travelled.

“We’re expecting large parts of the above-ground infrastructure - shelters, generators, power equipment and transmission equipment - to have been stolen or destroyed,” said Frank. “But large parts of the underground infrastructure - ducts and fiber cables - (should) be okay.”

The company has built an extra 1,000 kms (620 miles) of fibre, re-routing the network further east at a cost of $30 million and should launch by the end of 2015, he said.

Yet the network cannot carry data to or from Iraqi domestic users in line with government rules, and will do nothing to reduce Iraq’s Internet costs. Outside of Kurdistan a one megabit per second (mbps) broadband connection costs $399 per month versus $6.17 in Iran.

“Hopefully the regulatory body will come to its senses and let national traffic as well,” said Frank. “Why should people of other Gulf countries, Africa and Asia benefit while the people of Iraq can’t?” (Reporting by Matt Smith; Editing by Richard Pullin)