|
|
|
|
|
Last Words
Looking Beyond a War in Iraq
By SIMON ROMERO
17/02/2003
The telecommunications equipment industry is quietly pinning its hopes on a quick Iraqi war that would be followed by an American-led effort to rebuild the country after the ouster of Saddam Hussein.
Iraq, whose communications networks were heavily damaged in the 1991 gulf war, is sorely in need of an entirely new and modern telecommunications system for its civilian population.
And if a pro-American government were to emerge in Iraq, telecommunications equipment analysts say American companies like Lucent Technologies and Motorola could gain an edge over competitors from France and China that have won relatively modest contracts in recent years to help Iraq improve its communications network.
An important precedent, these analysts say, came after the gulf war when Saudi Arabia awarded Lucent at least $4.5 billion of contracts to overhaul its telephone system.
That deal, among the largest government awards to any equipment manufacturer in the last decade, was widely associated with an effort by allies in the region to favor American companies after the war.
"A new government in Baghdad more favorably disposed to the United States could tilt the geopolitical favor of telecoms' future contracts in the direction of American companies," said Joseph Braude, a senior analyst at Pyramid Research, a company in Cambridge, Mass., that conducts international telecommunications research.
Mr. Braude, who is also the author of "The New Iraq," a coming book about rebuilding that country's infrastructure, estimated that Iraq needed to invest at least $1 billion over the next several years to improve its basic fixed-line telephone system. Additional investments will be needed to introduce wireless communications and overhaul the nation's international communications links, Mr. Braude said.
Iraq, with a population of 24 million, currently has one of the least advanced telecommunications networks in the world. The number of telephone lines per 100 inhabitants has declined to 3, from 5.6 in 1990.
And, because of the network's decrepit nature, people who do have a telephone are often rationed to about 14 hours of use a day, according to Pyramid and the International Telecommunications Union in Geneva, which monitors investments in Iraq's phone system.
Iraq is also one of the few remaining nations lacking a commercial wireless network in its capital city. Some residents of relatively prosperous sections of the capital, Baghdad, have strengthened the radio power of their household cordless phones to allow them to use their handsets short distances from home.
But otherwise the only operable mobile system in Iraq is one that has been set up in the northern Kurdish region, which functions like an enhanced walkie-talkie system.
The establishment of a new wireless system in Iraq would come after several unsuccessful attempts to build one. The most recent effort was by Huawei Technologies, a Chinese equipment manufacturer, which was awarded a $28 million deal in 2001 by the Iraqi government to construct a mobile network with a capacity of 25,000 users. But Huawei pulled out of the project after complaints that the project might violate United Nations sanctions.
The Iraqi government reportedly chose another Chinese company, China National Technology Import, to replace Huawei in building the wireless network, but it is not clear how far China National has proceeded with the project. Several Turkish companies are also thought to have secured small contracts to improve Iraq's telephone system, according to United Nations data.
It is Alcatel, the large French communications equipment company that built much of Iraq's telephone system in the 1980's, that may have the most to lose in the event of a government change in Iraq that would favor American companies over European and Asian rivals.
Alcatel recently began work on a $75 million contract to build an international telephone exchange and a microwave telephone system linking Baghdad with the nation's central and southern provinces. Alcatel was also planning to restore numerous existing telephone links in Baghdad and install new exchanges with a capacity of 280,000 lines.
Tim Fiala, a spokesman for Alcatel, said the company was proceeding with both projects, but he declined to elaborate on Alcatel's preparations for possible political changes in the country. "We would not want to speculate on what will or will not happen in the future in Iraq," Mr. Fiala said.
One factor that could potentially complicate investments in Iraq's telephone system is the complexity involved in upgrading antiquated switching equipment because it is sometimes difficult to swap equipment designed by one company, in Iraq's case gear made by Alcatel using European switching technology, for that of another.
Still, few analysts doubt the need to modernize Iraq's telecommunications network. The nation was one of the last to acquire an Internet domain suffix, "iq," for Web and e-mail addresses, which is believed to have just a few hundred subscribers, according to Alan Mauldin, an analyst at Telegeography, a firm in Washington that measures the flow of telephone calls and Internet data around the world.
Iraq also has scant network carrying capacity, or bandwidth, compared with its Middle East neighbors, Mr. Mauldin said. The national telephone companies of Bahrain, Qatar, Kuwait and the United Arab Emirates have a digital transmission link to the rest of the world through their joint investments in the undersea Fiber Optic Gulf cable, an important connection that Iraq lacks.
Executives at American companies that are analyzing contract opportunities in Iraq are hesitant to discuss publicly their views of the Iraqi market. Mary Lou Ambrus, a spokeswoman for Lucent, which is based in Murray Hill, N.J., declined to comment.
Jennifer Weyrauch, a Motorola spokeswoman, said, "If an opportunity exists under the right circumstances we would take a close look at it." The company, a leader in wireless communications, operates in 10 countries of the Middle East and North Africa. "To this end," Ms. Weyrauch continued, "we urge the U.S. Congress and administration to prepare to promptly remove existing sanctions that would impede U.S. businesses from participating in the reconstruction and recovery effort."
It is premature and simplistic to discuss specific contract possibilities because of the many factors that would come into play after a war, the nation's outstanding foreign debt obligations and legal disputes that could emerge among companies with existing Iraqi contracts and firms seeking new business there.
"There are so many uncertainties involved in commercial ambitions in Iraq," said Barbara Oegg, a trade expert at the Institute for International Economics, a research group in Washington.
Still, the complexity related to Iraq has not stopped American communications companies from speculating about the future there. Joseph R. Wright, the chief executive of PanAmSat, the commercial international satellite operator based in Wilton, Conn., said in an interview that his company was evaluating the need for communications systems in Iraq that include the use of satellite links.
"Nation rebuilding in Iraq or Afghanistan or wherever would have an advantage by adopting hybrid technology solutions," Mr. Wright said.
Read the full article at The York Times
|
|
|
