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Iraq Telecommunications Report Q4 2011
Business Monitor International, Oct 2011, Pages: 79
BMI's Q411 report on Iraq's telecommunications market provides a comprehensive overview of the latest developments to occur within the country's mobile, fixed-line telephony and internet sectors. This quarter sees no further change to our forecasts depicting how the fixed-line telephony and internet markets will develop over the next five years. However, we have made some minor changes to our forecast for the development of Iraq's mobile subscriber market. Our new forecast for the mobile market incorporates the latest subscriber data, published by the country's two largest operators, Zain Iraq and Asiacell, for Q211. Data on these two operators is published by Kuwait's Zain Group and by Qatar Telecom (for Asiacell). We continue to estimate the number of subscribers served by Iraq's smaller mobile operators, including the Kurdistan-based cellco Korek Telecom.
Based on the data available, we estimate that Iraq had just more than 24mn mobile subscribers at the end of June 2011. This reflected a growth rate of 2.0% q-o-q and 10.4% y-o-y. Q211 continued the remarkable subscriber growth rates that were recorded in Q410 and Q111. The return to healthier rates of subscriber growth followed a lull in Q310. BMI attributes the stronger growth rates to network expansion investments by the operators, and by an increase in competition among the operators. In the future, BMI expects competition to be main factor driving mobile subscriber growth in Iraq.
In addition to the arrival of France Télécom through the acquisition of a minority stake Korek Telecom, we expect the possible award of a fourth mobile licence to boost competition. Our new mobile subscriber forecast for Iraq envisages just more than 25mn users at the end of 2011, equivalent to a penetration rate of 75.6%. By the end of 2015, we predict that Iraq's mobile penetration rate will have risen to almost 93%.
As of early September 2011, it appeared increasingly likely that Iraq's three mobile operators would face legal action for failing to meet an August 31 deadline to sell off parts of their respective businesses through initial public offerings. Under the 15-year licences awarded to Iraq's mobile phone operators in August 2007, the cellcos were required to go public on the country's bourse within four years.
Meanwhile, having delayed a listing that had been scheduled for 2011, Iraqi national telecoms operator Kalimat Telecom has announced plans to launch an IPO in 2012. Kalimat, which is majority owned by Kuwait's royal family, planned to provide mobile, fixed and data services throughout Iraq by November 2011. The company currently operates in six major Iraqi cities and expects to grow its subscriber base to 3mn by the end of 2012.
Despite receiving a slightly higher score in the Country Risks category, Iraq has slipped one position further down our table, after being overtaken by the UAE. Iraq now sits in eighth position in our Business Environment ratings for the MENA region, which is exactly at the mid-point in our table. The slightly higher score in this category reflects our increasingly bullish view on the Iraqi economy, primarily due to upward revisions to our oil and gas production forecasts and the awarding of a host of investment contracts.
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