Iraq Telecommunications Report Q1 2013

BMI View:

The Iraqi government has placed an exorbitant fee on 3G licences in the country. Although the network operators have voiced their displeasure, BMI believes the high cost of additional spectrum will not be a barrier for any of the three operators, which will all look to the positive consumer story in Iraq as justification for significant investments. However, we point to potential compromise over lower licence fees that could benefit consumers and the Iraqi economy.

Key Data

- The mobile market grew by 5.5% in Q312 and 11.2% in 9M12.

- Mobile ARPU fell marginally by 0.3% in Q312.

- Iraq had one of the lowest fixed-line and broadband penetration rates in the region at 5.5% and 0.4% respectively at the end of 2011.

Risk/Reward Ratings

Iraq dropped one place to eighth position in BMI's RRR table for Q113. The country scores below the regional average in all four categories of our ratings table as a difficult regulatory environment, including frequent government interference in policies and decisions, and political uncertainty counterbalance the positive economic outlook in the country, which is capable of driving demand for advanced telecoms services in the country.

Key Trends & Developments

Iraq's three mobile operators - Zain Iraq, Qtel-backed Asiacell and France Télécom-backed Korek Telecom - are gearing up to list at least 25% of their shares on the Iraqi stock exchange in 2013 in fulfilment of their licence conditions. The three operators were fined retrospectively in July 2012 for failing to meet the initial deadline of August 2011 and have now stepped up efforts to implement the directive,
despite lingering concerns over the market's liquidity and its ability to attract high-value investors amid the security challenges and political uncertainty in the country. Zain and Asiacell have confirmed plans to complete their listing by Q113, and we expect Korek to have similar plans, although it was yet to make this public at the time of writing. SHOW LESS READ MORE >

BMI Industry View 7

BMI Industry View 7

SWOT 8

Mobile SWOT 8

Wireline SWOT 10

Political 11

Economic 12

Business Environment 13

Industry Business Environment Overview 14

Middle East And North Africa Risk/Reward Ratings - Q1 2013 14

Industry Rewards 15

Country Rewards 16

Industry Risk 16

Country Risks 17
Table: MENA Telecom Risk/Reward Ratings, Q113 18

Iraq 18

Industry Forecast 20

Mobile 20
Table: Telecoms Sector - Mobile - Historical Data & Forecast 20

ARPU 22
Table: Telecoms Sector - ARPU - Historical Data & Forecast 22

Fixed Line 24
Table: Telecoms Sector - Fixed Line - Fistorical Data & Forecast 24

Internet 26
Table: Telecoms Sector - Internet - Historical Data & Forecast 26

Market Overview 29

Mobile - Q1 2013 29

Regional Perspective 29
Table: Iraq Mobile Market Regional Comparison, 2011 30

Key Developments 30

Mobile Growth 31

Market Share 32

ARPU 33

Networks 34

Mobile Content/Value-Added Services 36

Mobile Operator Tables 38
Table: Mobile Market Overview 38
Table: Zain 38
Table: Asiacell 39
Table: Korek 40

Data Networks Key To VAS Development 40

Crossovers Dominate The Landscape 40

OTT Players And Content Providers: Collaboration vs Competition 42

Apps Will Thrive On Advanced Data Networks 42

M2M Offers Opportunities 43

Fixed Line - Q1 2013 43

Broadband - Q1 2013 47

Industry Trends And Developments 52

Industry Trends And Developments 52

Regulatory Development 53

Regulatory Development 53
Table: Iraq - Regulatory Bodies & Their Responsibilities 53

Competitive Landscape 57

Competitive Landscape 57
Table: Key Players - Iraq Telecoms Sector 57
Table: Selected Operators - Financial Indicators 57

Company Profile 58

Iraqi Telecommunication & Post Company (ITPC) 58

Zain 62

Asiacell 66

Regional Overview 71

Alcatel-Lucent - Returning To Prominence In Emerging Markets 71
Table: Alcatel-Lucent - Quarterly Breakdowns Of Revenue By Segments, 2011-2012 (EURmn) 71

Under Pressure Despite Carriers' Needs For More Bandwidth 73

Demographic Forecast 76

Demographic Forecast 76
Table: Iraq's Population By Age Group, 1990-2020 ('000) 77
Table: Iraq's Population By Age Group, 1990-2020 (% of total) 77
Table: Iraq's Key Population Ratios, 1990-2020 78
Table: Iraq's Rural And Urban Population, 1990-2020 79

Glossary 80

Glossary 80
Table: Glossary Of Terms 80

Methodology 82

Methodology 82
Table: Key Indicators For Telecommunications Industry Forecasts 82

Telecoms Business Environment Ratings 83
Table: Ratings Indicators 84
Table: Weighting Of Indicators 85

Japan Company Profile
Kawasaki Kisen Kaisha, Ltd (K Line)
NYK Container Line
Global Company Strategy
Maersk Line
Mediterranean Shipping Company
CMA CGM
Evergreen Line
COSCO Container Lines Company
Hapag-Lloyd
APL
Hanjin Shipping
China Shipping Container Line (CSCL)
Mitsui OSK Lines