With the reconstruction work going on in full swing, Iraq's mobile phone industry is set to trigger heated competition among telecom infrastructure suppliers and service providers and a clash between competing cellular technologies, as the country struggles to re-establish communications within the country and with the outside world.
Regional and global players are watching the situation keenly, as Iraq presents huge business prospects for telecom companies. Industry watches say that it could be the biggest testing ground for the two competing cellular data transmission technologies: the GSM (Global System for Mobile Communications) and CDMA (Code-Division Multiple Access).
CDMA, a relatively new entrant in the mobile market, commands just about 12 percent of the global market, while GSM dominates with nearly 70 percent share. CDMA is used largely in North America and parts of Asia, while GSM is more widespread over a larger geographical area. With the Americans in charge of the reconstruction efforts in Iraq, industry analysts say the battle between the two technologies could hot up.
"World trends, preferences and major advantages demand that GSM technology should be the technology of choice to restart mobile phone services in Iraq," says Bashar Dahabra, general manager of Acotel Middle East. "The entire Middle East region is familiar with GSM and introducing CDMA would lead to problems and inconsistency.”
“In addition, GSM's advantages like international roaming facility, mature network with 450 million subscribers, more innovative features and secure data encryption puts it ahead of its younger competitor."
"Authorities in charge of Iraq's reconstruction should keep in focus the mandate to create a network that will allow Iraqi people to communicate comfortably and cost-effectively, with little restrictions and plenty of benefits such as roaming facility. If these goals are kept in mind, the
GSM technology would win hands down," said Dahabra.
With the telecom network in shambles, the only mobile communication available is via satellite through Thuraya handsets. There are estimated to be 20,000 Thuraya subscribers in Iraq. These phones are also used by relief agencies like the Red Cross to keep communications going.
Some 80,000 Thuraya sets are due to be supplied shortly. The basic disadvantage of Thuraya system is that each handset cost upward of $600. Thuraya has been vying for a larger share of the Iraqi market by dropping drastically its charges from $10 per minute to six dollars per minute.
Industry analysts also say that the authorities should appoint more than one mobile service provider to ensure timely completion of projects. This will also engender healthy competition and lead to cost-effective deals for the government.
"Having just one mobile service provider will result in a monopolistic situation and lead to complacency in the absence of competition," said Dahabra. "Multiple service providers will lead to more efficient and innovative services and more competitive rates. There will be constant improvement in services, due to intense competition among the players to prove their worth."
In the next three years, Iraq's mobile phone subscribers are expected to increase to five million. A judicious selection of telecom infrastructure and cellular technology will therefore be crucial to the success of the project of putting Iraq back on the cellular map.
"The right cellular system will enable Iraq to accelerate the pace of re-construction, hasten humanitarian relief work and boost business by linking the country to the rest of the world," said Dahabra. "A powerful and universally accepted cellular network, supported by a telecom infrastructure that facilitates Internet usage, could pave the way for Iraq's early recovery, enabling business to flourish and attract more foreign investment."
"The reconstruction of Iraq hinges on the ability of the interim government to adopt urgent and sensible measures to accelerate the speed of reconstruction, without allowing politics to come in the way. Restoring communications across Iraq is a herculean task and it should be left to Information Technology (IT) and telecommunication experts," said Dahabra.
"Iraq is certainly heading for a boom in the IT and communication sector. But without the right technology and right companies, the full benefits of reconstruction might not percolate down to the Iraqi people."
According to Dahabra, Iraq seems to be poised to fuel the war between GSM and CDMA technologies. Both have their advantages and disadvantages, but most analysts concur that GSM is best suited for Iraq.
GSM is widely used by wireless users across Europe and Asia. Its advantages include a global subscriber base of 450 million; international roaming permits for using one phone across Western Europe; stable network with robust features, availability of subscriber identity modules and easy upgrade to 3G.
CDMA offers increased communications security, simultaneous conversations, smaller phones, little cell-to-cell coordination needed by operators and extended reach. However, CDMA does not work in France, Germany and UK, and its network is still under construction.
Acotel Group Spa, the Italian wireless application service provider and multimedia service integrator, is headquartered in Rome and has operations and customers in Europe, Africa, the Middle East and Latin America. The group operates as a content provider and aggregator and messaging platform vendor to Wireless Network Operators. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
