How Mobile Broadband can Revive Telecoms in Iraq

With Iraqi telecom industry still in the 2G era, the ongoing political instability and lack of government support is leading to delays in the auction for 3G since the year 2011. Nevertheless, the imminent launch of 3G services driven mobile broadband is expected to boost service quality, increase revenue, and encourage private participation in the country’s telecom market.

New analysis from Frost & Sullivan, 'Iraq Telecom Market Analysis', finds that the market earned revenues of USD 3.75 Billion in 2013 and estimates this to reach USD 8.18 Billion in 2020. Three telecom operators hold fort in the Iraqi telecom space: Zain Iraq caters to nearly 50 per cent of telecom subscribers, Asiacell to 32 per cent, and Korek, 18 per cent.

“The demand for high-speed Internet in the education and government verticals is fuelling the need for better bandwidth capacities, lending momentum to the telecom market in Iraq,” said Frost & Sullivan Information and Communication Technologies Research Analyst. “The installation of high-speed cables for corporates and subsequently for households is a priority for the government. This will open up immense opportunities for telecom operators in the country.”

However, the allocated spectrum for data services and broadband is currently very low, escalating costs and dissuading operators from investing in the market. The high prices also deter consumers from adopting data services.

This situation will change when government plans to integrate Worldwide Interoperability for Microwave Access (WiMAX), Global System for Mobile Communications (GSM) and Long-Term Evolution (LTE) take effect, improving the affordability of Internet services. Satellite terminal prices too will drop exponentially, and telecom service providers can gain expertise in implementing cost-effective networks.

“Meanwhile, private participants are looking to transition directly from 2G to 4G and LTE services to combat the delay in 3G deployments,” noted the Analyst. “As this is a big leap in terms of cellular infrastructure expansion, private telecom firms will look to build partnerships with international companies to develop local infrastructure and establish robust standards.”

The use of the latest value-added products, along with efforts towards network modernisation will differentiate operators from the rest of the competition. Exploiting the lack of fixed and high-speed broadband services to launch portable data service devices will also help operators strengthen their footprint in the Iraqi telecom market.