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Iraq awarded mobile telephone contracts to three Middle Eastern companies, the communications minister said Monday, with wireless phone service expected to begin within weeks for a country that for the most part never has had it.
"This is an important day for Iraq," said Communications Minister Haider Jawad al-Aubadi. "Iraq badly needs the mobile system to enhance the security of the country."
The construction of the systems will bring hundreds of millions of dollars of foreign investment into the country.
AsiaCell was given the contract to operate in the northern third of the country; Orascom was given the central region, including Baghdad; and AtherTel will cover the south.
The companies all operate with the GSM phone standard widely used in Europe and the Middle East.
"Until now, we were denied mobile phones. Iraqis will welcome the chance to use mobile phones to talk to their families, friends and for business," al-Aubadi said.
Orascom is an Egyptian telecommunications company. AsiaCell was believed to be part of Asia Telecom based in the Kurdish north of the country, where cell phone service existed even before the collapse of the Saddam Hussein regime.
AtherTel is made up of two Kuwaiti partners, including mobile company MTC, with offices in Basra and Baghdad, a spokesman said.
Each of the three companies, al-Aubadi said, had between 10 percent and 50 percent local ownership.
During the bid process, authority officials said the winners would have to put up a $30 million bond, with the licenses lasting for just two years, forcing the network operators to hope for a renewal afterward.
Once the networks are built, calls will cost between 8 cents and 10 cents per minute, al-Aubadi said, and phones will cost from $50 to $60.
"The race is now on to see which of the three will launch the first service to the public," al-Aubadi said.
The licenses were issued after 35 companies submitted more than 100 bids. The bidding, which was conducted by the U.S.-led Coalition Provisional Authority, closed Aug. 21. Al-Aubadi said the announcement of the winners was delayed until Monday because he was named minister Sept. 4 and needed time to review the submissions.
Over the summer, Bahrain's telephone company, known as Batelco, spent $5 million setting up a wireless network in Baghdad without the permission of the U.S.-led authority, which ordered Batelco to cease service.
Other than that short-lived network and existing systems in Kurdish areas, Iraq's only postwar wireless service consisted of a Pentagon-funded system installed for officials in Baghdad by WorldCom Inc., now known as MCI, and a temporary network in the south set up by MTC and Britain's Vodafone.
At least one American company stands to benefit from the contracts. Network equipment supplier Motorola Inc. has contracts with Orascom and MTC and helped both companies assemble the winning bids, Motorola spokesman Norm Sandler said.
Sandler would not specify the monetary value of the deals or say whether Orascom and MTC have designated Motorola as their exclusive supplier, though he said "we look forward to participating with them in these initiatives."
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