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Kuwait’s Zain is considering several tender offers to manage its telecoms network in Iraq and will likely award the contract in the next few weeks, a company spokesman has said.

According to Reuters, Zain refused to name bidders for the managed service agreement, but said there were at least three, with international players such as Nokia Siemens Networks, Huawei Technologies and Ericsson likely candidates.

As a specialist, the winner will be better able to improve network quality, the spokesman said, while Zain can focus on marketing, sales and improving customer service.

The Iraqi government has criticised Zain and other providers for patchy coverage, but Zain blames reception problems on military jamming as security forces try to prevent militants from detonating bombs. In some areas, Zain also relies on generators to power its infrastructure.

Zain’s 12 million subscribers in Iraq make it the market leader, but it faces stiffening competition from AsiaCell, part-owned by Qatar Telecom (Qtel), and Iraqi Kurdistan-based Korek Telecom.

(Source: Kipp Report)

Citigroup and Bank of Baghdad have announced a strategic partnership which offers corporate clients, with major business presence in Iraq, a seamless cash management solution and other relevant banking services.

The client offer encompasses account services, domestic and international payments and collections, liquidity management and electronic banking solutions, backed by a comprehensive customer service and streamlined documentation processes.

This key partnership leverages Citi's state-of-the-art global cash management platform, as well as Bank of Baghdad's franchise and extensive branch network. The partnership also gives Bank of Baghdad, a subsidiary of Kuwait's Burgan Bank, access to Citi's global network across more than 107 countries for cash management solutions and other banking services.

Steve Donovan, Head of Global Transaction Services, Middle East & Pakistan at Citi, said:

"We are delighted to announce this partnership with Bank of Baghdad which is in line with our commitment to Iraq as well as our strategy to bring the right capabilities to our clients through our own global network or through partnerships with prime local banks. This alliance certainly creates a win-win situation for our mutual client base."

Dr. Younes Brouche, Executive Vice Chairman at Bank of Baghdad said:

"Bank of Baghdad has had a long standing and successful relationship with Citi. It brings together our bank's extensive network in Iraq, our product suite and service excellence with the global reach of Citi. We look forward to working with Citi to provide valued clients with bespoke solutions to help them with their operations in Iraq."

Eduardo Eguren, Chief Executive Officer at Burgan Bank Group, said:

"We are pleased to announce this winning partnership. Bank of Baghdad is a fast growing member of Burgan Bank Group and has successfully placed itself as one of the major players in Iraq. This partnership will indeed add value to both Bank of Baghdad's and Citi's clients as well as to Burgan Bank Group clients."

Citi has been in the Arab World for nearly 50 years and views the region as critical to its global franchise. It currently offers full scale corporate banking services across ten Arab countries including Egypt, UAE, Lebanon, Jordan, Tunisia, Morocco, Algeria, Bahrain, Qatar and Kuwait as well as Pakistan. Its consumer banking services cover UAE, Egypt, Bahrain and Pakistan, while it maintains close relationships with high net worth clients in the region through the Citi Private Bank.

(Source: Zawya)

Clyde & Co has been appointed by Lukoil Mid-East Ltd to support them in their development of the West Qurna-2 field in Iraq. With recoverable reserves of 43 billion barrels West Qurna is the second largest oil field in the world.

This is a landmark project for Lukoil, representing as it does a planned production capacity of 1.8 mbd by 2017. This equates to more daily production than Libya currently achieves as an order of magnitude indicator. With planned investment levels of US$4.5bn over the next 3 to 5 years, and a total investment projection of US$30bn, the scale of this project for Lukoil is clear.

Commenting on the selection of Clyde & Co, Director of Legal Affairs for Lukoil Mid-East, Nikolay Isaakov said: "We are pleased to have selected Clyde & Co for a place on our panel of outside law firms for work in connection with Lukoil's operation of the West Qurna-2 field in Iraq. Clyde's major presence in the Middle East and their experience in Iraq, together with their oil and gas expertise, made them an obvious choice for us. We look forward to working with the Clyde's team on this important project."

With first oil projected for 2013 Lukoil and its IOC partner Statoil have an aggressive time table in place. As one of the world’s largest untapped oil fields, the second phase of West Qurna has known reserves of 12.9 billion barrels, and was awarded to Lukoil by Iraqi Ministry of Oil following a lengthy and keenly contested bidding process. The continuing development of this vital national asset, is indicative of the continued improvement in the national oil industry of Iraq.

The Iraqi unit of Kuwait telecoms firm Zain is planning to spend $100m this year as part of its plan to expand throughout the entire Kurdish region over the next five months, its chief executive said yesterday.

Emad Makiya, CEO of Zain Iraq, the country’s biggest mobile phone operator, said the firm planned to extend its services to “every remote village” in the semi-autonomous northern area after officially launching operations in its three main cities on Wednesday. It started initial operations in Iraqi Kurdistan in October.

“The roll out has been completed for phase one. We’re starting phase two very soon. The whole investment is going to be in the neighbourhood of $100m for Zain in the Kurdish region,” he said. “Currently we are covering the metropolitan cities of Dohuk, Sulaimaniya and Erbil, and the connecting highways between the three governates and the rest of Iraq.”

Makiya said phase two involved getting vendors to help Zain extend services around the region and said the ground work for this would start in May. Iraq did not have a mobile phone market under the rule of Saddam Hussein, but the industry has boomed in the past eight years after the 2003 US-led invasion that toppled him.

Zain, with 12 million subscribers, competes with AsiaCell and the Iraqi Kurdistan-based Korek; it expects to add up to 18,000 new subscribers a month from Iraq’s Kurdistan Region.

Makiya said Zain had formally appealed against a $262m fine imposed by Iraq in January for breaching its license. Iraq’s Communications and Media Commission (CMC) last month said it had fined Zain for putting 5 million SIM cards in the local market without permission.

Zain had said it was surprised by the penalty and said the licence fee it had paid Iraq allowed it to build a network, use the spectrum and issue a range of SIM card numbers. “We’re fighting it legally. We’ve already submitted our legal explanation to the CMC and to the hearing committee and we’re waiting for the results,” Makiya said. “We are fully confident that this should be resolved in an easier manner than resort to the law.”

He said Zain was also in talks with AsiaCell — which earlier this month said it had stopped interconnection with subscribers of the “unlicensed lines” — to get the lines reconnected. The Iraqi government has criticised Zain and other providers for patchy coverage, but Zain blames reception problems on military jamming as security forces try to prevent militants from detonating bombs.

Makiya said operating in the Kurdish region was easier, particularly because it was safer than the rest of Iraq. “There is no interference over there like you have here in Baghdad because the region is very secure,” he said. The lack of jamming and the better infrastructure network in the Kurdish area should also improve the quality of calls, he added.

(Source: The Peninsula Qatar)

Iraqi mobile operator AsiaCell has threatened to sue Kuwait-based telecoms provider Zain, after it allegedly distributed millions of unlicensed SIM cards, hitting AsiaCell's market share.

It has also disconnected several million Zain Iraq subscribers whose lines have not been fully licensed by the Communications and Media Commission (CMC).

AsiaCell, in which Qatar Telecommunications Co (Qtel) has a 30 percent stake, states that the CMC requested that all telecom companies immediately discontinue their interconnection with unlicensed lines under threat of litigation. Based on these directives, Asiacell has disconnected these lines to avoid legal ramifications.

Asiacell says it retains its legal right to demand compensation from Zain for distributing millions of unlicensed SIM cards, thus significantly damaging Asiacell’s market position by hindering its ability to supply the Iraqi market with the necessary amount of SIM cards and forcing Asiacell to reuse old lines for some of its offers.

Moreover, it claims Zain’s actions have resulted in limiting the number of lines available to Asiacell, which has stunted the company’s ability to launch new offers that benefit Iraqis in various provinces.

In February, the CMC fined Zain $262 million for putting 5 million SIM cards into the local market without permission, in breach of its licence. Zain said it would appeal against the fine.

Reuters reports that on Tuesday, Zain said in a statement that it was "seeking discussions with AsiaCell" on the issue. "Based on signed agreements and recognized international practices, we remain very confident of our legal position, and we hope that this matter will soon be resolved amicably, so that customers of both mobile operators are properly reconnected."

The Iraqi government has criticised Zain and other providers for patchy coverage. Zain has blamed reception problems on military jamming as U.S. and Iraqi security forces try to prevent militants from detonating bombs.

Zain, the Gulf region's third-biggest telecoms firm by market value, competes with Korek, based in Iraqi Kurdistan, and AsiaCell.

Zain, which has around 53 percent market share in Iraq, won a 15-year licence for $1.25 billion in 2007. It was fined $18.6 million by Iraq for poor cellphone service in 2009.

It had more than 12 million subscribers at the end of 2010 and expects to add up to 18,000 a month after it began service in the semi-autonomous northern Kurdish region.

In June 2010, AsiaCell had 8 million subscribers or almost 38 percent of a market with 70 percent penetration.

(Sources: Reuters, AsiaCell)

Qatar Telecom (Qtel) has announced significant growth last year in its Iraqi Asiacell operations.

Following on from the strong subscriber growth achieved in 2009, Asiacell has continued to increase its subscriber base this year leveraging its country-wide network.

Asiacell's total subscriber base at 31 December 2010 stood at 8.1 million (FY 2009: 7.4 million). At the same time, Asiacell has delivered a number of significant enhancements this year to both its infrastructure and its service line.

These efforts combined have resulted in Asiacell delivering revenue growth in 2010 of more than 26.4% to QR5.1bn (FY 2009: QR4.0bn). EBITDA also increased, growing 21.2% year-on-year to end 2010 at QR2.6bn (FY 2009: QR2.2bn), a significant achievement in what remains a challenging and competitive marketplace.

Reuters reports that Iraq has fined Kuwait-based telecoms provider Zain $262 million for putting 5 million Sim cards in the local market without permission, contravening its licence. The company has three months to pay.

Zain's Iraq unit will appeal the fine, its chief executive, Emad Makiya, said.

"They have no right to issue such a penalty," Makiya told Reuters.

The Iraqi government has criticised Zain and other providers for patchy coverage. Zain has blamed reception problems on military jamming as U.S. and Iraqi security forces try to prevent militants from detonating bombs.

Zain, the Gulf region's third-biggest telecoms firm by value, competes with Korek, based in Iraqi Kurdistan, and AsiaCell, part-owned by Qatar Telecommunications.

Zain, which has around 53 percent market share, won a 15-year licence for $1.25 billion in 2007. It was fined $18.6 million by Iraq for poor cellphone service in 2009.

It had more than 12 million subscribers at the end of 2010 and expects to add up to 18,000 a month after launching services in the Kurdish region, Makiya told Reuters.

Iraq had no mobile phone market under the rule of Saddam Hussein but market growth has been rapid since the 2003 U.S.-led invasion that ousted him.

Zain Iraq said it was surprised by the penalty and was preparing a formal legal challenge.

Makiya said the license fee Zain paid Iraq allowed it to build a network, use the spectrum and issue a range of SIM card numbers. "This is the price. We've already paid the price," he said.

(Source: Reuters)

Reuters reports that the chief executive of private equity group MerchantBridge and two JPMorgan executives were among seven people killed when a small plane crashed in northern Iraq.

The plane went down shortly after takeoff on Friday from Sulaimaniya airport in Kurdistan.

MerchantBridge CEO Basil al-Rahim and Abdallah Lahoud, a partner in the company, died in the crash, MerchantBridge said in a statement.

Airport officials said the businessmen on the plane had flown to Sulaimaniya to visit the offices of AsiaCell, one of Iraq's major mobile phone service providers, which is partially owned by Qatar Telecommunications.

Bloomberg reports that a mechanical problem led to a fire in one of the engines.

Rahim was a member of the AsiaCell board of directors, AsiaCell said in a statement. JPMorgan executives Murad Megalli and Javier Zurita also were killed in the crash, along with the three crew members on board, it said.

MerchantBridge said last October it had launched an equity fund in Iraqi equities. An executive said at the time that the company had over $1.5 billion worth of investments in the Iraq.

Speaking from Beirut today, MerchantBridge Chairman, Abdulaziz Al Abdulkader said:

"Our thoughts are with the families of our much loved brothers, friends and colleagues Basil and Abdallah. We will pray for them and may God have mercy on their souls. We give thanks for all they have achieved in their lives. Speaking as Chairman of MerchantBridge, I would also like to ask that they be remembered for everything they have contributed to the commercial regeneration of the Middle East and in particular to Iraq.

"The partners and employees of MerchantBridge intend to continue the valued work of our colleagues Basil and Abdallah. We ask for a period of calm reflection whilst we decide how we best continue to advise our investors and partners."

(Sources: Reuters, PR Newswire, Bloomberg)

BMI’s Q1 2011 update on Iraq’s telecommunications market provides comprehensive coverage of recent developments in the country’s mobile, fixed-line telephony and internet sectors. This quarter sees our five-year growth forecasts for the country’s telecoms service sectors extended through to the end of 2015. Our new mobile subscriber forecast for Iraq incorporates the latest subscriber data, published by the country’s two largest operators, Zain Iraq and Asiacell, for the third quarter of 2010. Data on these two operators is published by Kuwait’s Zain Group and by Qatar Telecom (for Asiacell). We continue to estimate the number of subscribers served by Iraq’s smaller mobile operators; among them is the Kurdistan-based cellco Korek Telecom. In late November 2010, it was reported that France Telecom had entered into talks to buy a minority stake in Korek Telecom, as part of a strategy to expand its presence in the Middle East. According to the Financial Times, the French telco is interested in eventually securing a controlling stake in Korek.

As of September 2010, we estimate there were 21.344mn subscribers in the Iraqi mobile market. Although this reflected y-o-y growth of 11.6%, it represented an increase of just 0.5% in relation to the previous quarter. Q310 was one of the lowest growth quarters experienced by the Iraqi mobile market to date. Furthermore, it stood in stark contrast to the 1.3mn net customer additions in Q210. It appears that both Zain and Asiacell experienced relatively weak customer growth in Q310 compared with the previous quarter. This contributed to the poor performance in the market overall. Despite the relatively poor performance in Q310, we estimate that, for 2010 as a whole, Iraq’s mobile market grew by 14.4%. By the end of the year, we believe there were some 23.57mn mobile customers, equivalent to a penetration rate of almost 75%.

Business Monitor International (BMI) has published a new report on the oil industry in Iraq.

Summary:

BMI forecasts that Iraq will account for 10.27% of Middle East (ME) regional oil demand by 2015, while providing 11.56% of supply. Middle East regional oil use of 4.98mn b/d in 2001 will rise to an estimated7.40mn barrels per day (b/d) in 2010. It should average 7.70mn b/d in 2011 and then rise to around8.70mn b/d by 2015. Regional oil production was 22.83mn b/d in 2001 and will average an estimated24.96mn b/d in 2010. After an estimated 25.22mn b/d in 2011, it is set to rise to 27.24mn b/d by 2015. Oilexports are growing steadily, because demand growth is lagging the pace of supply expansion. In 2001,the region was exporting an average of 17.85mn b/d. This total will ease to an estimated 17.55mn b/d in2010 and is forecast to reach 18.54mn b/d by 2015. Iraq has the greatest export growth potential, followedby Qatar.

In terms of natural gas, the region will consume an estimated 391bn cubic metres (bcm) in 2010, with demand of 483bcm targeted for 2015, representing 23.7% growth. Production of an estimated 467bcm in2010 should reach 614bcm in 2015 (+31.4%), which implies net exports rising to 130bcm by the end ofthe period. In 2010, Iraq will consume an estimated 1.28% of the region's gas, with its market shareforecast at 2.38% by 2015. It will contribute 1.07% to estimated 2010 regional gas production and by2015 could account for 2.93% of supply.