Iraqi Wireless Carrier Thrives in Throes of War

The company is adding more than 1,000 subscribers per day in Iraq’s north and, with only 2 small competitors, has accrued 460,000 customers, exceeding first-year targets. Established in 1999 under the protection of the U.S. “no-fly zone” in Kurdistan, the unit of Kuwait’s Wataniya Telecom had to build out an inherited network with just 40,000 subscribers and in Dec. 2003 received one of 3 regional licenses, Moyse said. The 2-year GSM licenses are exclusive the first year and come with “strong renewal possibilities,” he said. The company invested $135 million in the network in its first year and plans at least $200 million in capital spending this year.

Asiacell has a goal of a million customers by year- end as it enters the populous central region, including Baghdad, and moves past the other licensees in size before heading into Basra in the south, Moyse said. Iraqis will be used for the expansion, “because it’s far too dangerous for foreigners.” Asiacell expects its penetration to grow to 25-35% the next 2 years, from 5.5% last year, Moyse said. GPRS has attracted 20,000 subscribers in a few months and will continue soaring, he predicted.

“It’s an open market, and there’s a lot of profit to be made,” Moyse said, explaining why the risks were justified. Iraq has a pent-up demand not just for a service unavailable before, but the latest and greatest. But customers are very “cost conscious,” he added. The business is 99% prepaid because the weakness of the banking system means credit information isn’t available, Moyse said. He said resistance to subscriptions and monthly fees would persist.

Security problems affect mainly site engineers and builders, Moyse said. The company had to recruit around the world to find experienced staff but succeeded, he said. Distribution channels, ad agencies, subcontractors and ad agencies remain hard to find in Iraq, Moyse said. Electricity shortages require many back-ups. Service is jammed near U.S. bases “for obvious reasons,” he said. Moyse wouldn’t disclose the terms under which authorities can tap networks for investigations but said they were similar to those imposed by Western countries. -- Louis Trager

Wireless Communications Assn. Symposium Notebook…

Walt Disney will give up on WiMax unless it starts making consumer sales this year over the still-emerging broadband wireless technology, a company executive warned in a blunt talk to the Wireless Communications Assn. Symposium in San Jose. Howard Liu -- dir.-digital network architecture, new technology & development -- first set a 9-month deadline, after which the company will pursue one of the many other contending technologies, but he then eased it slightly. “That’s a problem for us here in the WCA -- we have more than enough technologies and none of them is extremely successful,” Liu said Wed. He said Disney was also working with Panasonic and Samsung on broadband over powerline technology. He suggested the urgency resulted from broadband wireless being “essential” to electronic content distribution, a point he made twice at some length. Entertainment creators need broadband wireless that is “intelligent” and “application-centric,” Liu said. The Disney-i service, created in Japan with DoCoMo, demonstrates the pipe’s ability to optimize content use is more important than its size, he said. Disney wants to collaborate with services providers to reach consumers directly in homes and cars and on handheld devices, but the company is “not interested in becoming a carrier” itself, Liu said. He said digital rights management technology, based on retaining until payment a tiny portion of the data needed to enjoy a work, would be the way to secure content. “We still have a lot of problems with that [DRM], but that is the direction we are going.”

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The FCC has fingers crossed that new rules remaking a spectrum set-aside for education result in more-efficient exploitation of the under-used resource -- after “vigorous debate within the Commission” on retaining the concept produced a report and order that left some players dissatisfied, said Wireless Bureau legal adviser Uzoma Onyeije. The transformation of Instructional TV Fixed Service effective this week to Educational Broadband Service (EBS) “is a beautiful example of how difficult it is to make everybody happy,” he said. The new name is meant to signal that the spectrum “was not just a fixed service” and “not just a video service,” as the Commission moves away from use restrictions. In place of the FCC’s traditional strategy of small steps to address education’s needs, this proceeding “tried to take a holistic… approach,” Onyeije said, creating Broadband Radio Service (BRS) as well as EBS, outlining a “transition path” to them, adopting a more effective band plan, cleaning up technical “underbrush,” standardizing practices and procedures and retaining the educational eligibility restriction. The Commission hopes educators who haven’t made good use of the spectrum “can see the value of this - - and the commercial partners can ultimately help in bringing that home,” he said. Movement to national or at least regional projects would also be welcome as taking advantage of economies of scale, Onyeije said. Demonstrations of educational value “will only make the market larger” for wireless data overall, he said. “We will continue to watch and monitor progress in this band.” The BRS rules represent “really fantastic results for us,” said Todd Rowley, chmn. of the WCA Task Force on Broadband Public Safety and Sprint spectrum management vp. “Of course, it’s not over for us,” in light of requests for FCC reconsideration and a notice of further rulemaking. “Big legal bills -- that’s been a constant” in the years of work on the issue, he said. But Rowley said he hoped history would see the Commission action as having made wireless broadband take off. “It really feels a whole lot better than it did 2 or 3 years ago… We feel like it’s really there; it’s really about to happen.” He said “a lot of pieces are falling into place” -- spectrum availability and other conducive regulation, the technology, applications, capital, economic climate and real operators. But “there’s still a lot of questions out there, unanswered questions, and there’s a lot of work to be done.”