Zain Iraq to start operations in Kurdistan in 2011

Aims to invest up to 20% of revenue to support expansion plans.
Mobile telecommunications in the Kurdish region has previously been dominated by two companies, Korek Telecom and Asiacell.
Mobile telecommunications in the Kurdish region has previously been dominated by two companies, Korek Telecom and Asiacell.

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The Iraqi unit of Kuwait telecoms firm Zain will start operating in Iraqi Kurdistan in January and expects to boost its subscriber base by up to two million in 2011, its chief executive said on Sunday.

Emad Makiya, the new CEO of Zain Iraq, said Zain group, the Gulf region's third-largest telecoms firm by value, would continue to invest in Iraq, a key high-growth market, and expected revenue for 2011 to be up at least 15 to20 per cent.

"We will be entering Kurdistan. You will see us in there, a fully fledged network, by the beginning of 2011 ... We want to reach all the Iraqis everywhere," Makiya told Reuters in his first interview since taking over at the helm in June.

"Iraq is on the top of their list. It's their (Zain Group's) baby, and it's really important. The group is really paying huge attention to Iraq. They want to make sure it's successful, and they're investing."

The mobile phone market did not exist in Iraq under the rule of Saddam Hussein but has boomed since the 2003 US-led invasion that toppled him.

Zain is the biggest operator in the country and has invested $4.5 billion in its network after securing a 15-year license for $1.25 billion in 2007. It has around 54 percent of the market share and competes with AsiaCell and Korek, which is based in Iraq's Kurdish-run north.

Makiya, who was previously the Sales Director for Motorola Networks Middle East, said Zain Iraq would invest 16 to 20 per cent of its revenue every year into upgrading and expanding its network in the country for at least the next three years.

He said his key focus aside from the expansion in the Kurdish region would be to start 3G services in Iraq.

"The next step, after we do the expansion, is to look into new technologies ... We are already testing 3G as we speak. So we're anxious to do this. We're just waiting for the license," he said, adding that the firm had the capital and was open to acquiring data or fibre optic operators to aid in its 3G plan.

The Iraqi government, which last July approved a plan for a fourth mobile phone operator in the virgin market, has strongly criticised Zain and its rivals for their patchy coverage, and imposed fines.

Zain has rejected the criticism as unfair and blamed reception problems on military jamming as U.S. and Iraqi forces try to prevent insurgents from detonating bombs.

Makiya said he expected jamming of the network to get better as US troops pull out of Iraq ahead of an August 31 deadline to end combat operations. He said the firm had lost millions of dollars due to jamming.

"We face security issues, we face jamming issues, we have power issues," he said, adding that he thought the market would become saturated with a fourth mobile phone operator.

The chief executive, who enjoys reading and swimming in his spare time, said while security had improved, the company still battled with the acute power shortages in Iraq. Zain's entire network in the country operates on generators.

Zain Iraq posted a 10 per cent rise in revenue to $723.9 million for the first-half of 2010, while revenue for 2009 climbed 4 per cent to $1.342 billion.

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