High Costs Hamper Iraqi Telecoms

"We are competing in an environment which is very tough and difficult, especially security-wise and also because of the problem existing between the CMC and ITPC. We are caught between both of them," said Saman Shali, general manager for network provider Kalimat Telecom.

"The lack of electricity puts a big burden on the expenses of all operators, not just Kalimat ... A big chunk of revenue is going to this," he added.

Iraq did not have a mobile phone market under Saddam but the industry has exploded in the past eight years. There are now about 23 million mobile phone subscribers, according to the CMC.

But landline and internet development has lagged badly. Iraq currently has 1.2 million landlines, of which only 800,000 are in working order, according to Communications Minister Mohammed Allawi. Internet penetration sits at three percent.

Allawi has said the ministry aims to boost fixed-line phone penetration and internet reach to 25 percent within five years through a $3 billion development project. It has allocated $500 million to spend on the telecoms industry this year.

However, uncertainty over the roles of the CMC and ITPC in Iraq has slowed down vital development work, including delays over the issuing of a fourth mobile phone operator license and introducing 3G to the local market.

"The lack is the law. There is no clear definition between our roles," ITPC Director General Kassim Al-Hassani said.

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