Iraqna Telecom

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In October 2003, Iraqna, a consortium led by Egyptian based Orascom Telecom Holding S.A.E. (OTH), was granted by the Coalition Provisional Authority (CPA) of Iraq a two-year license to build and operate GSM service in Iraq’s central region which includes Baghdad. The license was one of the three awarded by the CPA in 2003. Kuwait based telecom firms MTC and Wataniya also won licenses to operate in the Southern and Northern regions of Iraq respectively. Even though renewal rules were not specified at the time licenses were granted, it was expected that the licenses will be extended before expiring in June of 2005. Iraqi Ministry of Telecommunications selected the winning consortium from more than 100 bidders under no specific bid criteria. All three companies paid only an annual license fee to the Telecommunications Ministry, which had not asked for any royalty fee and gave each firm two months to begin operations. The license agreement restricted all three companies to offering services in their regions until they meet their license obligation to establish a well functioning network within that region first. Motorola was to supply the bulk of the GSM network and secure a majority of the estimated US$100 million in financing for equipment services to be deployed over the initial two year network rollout phase. Coverage of the central region was completed in January 2004. By end 2004, Iraq's three mobile network licensees had all begun to expand their networks beyond the original operating regions, after satisfying their 12-month roll-out obligations. Iraq was to become a fully competitive, three-operator market by early 2005. In July 2005, Iraqna became a fully owned subsidiary of Orascom after Orascom bought out all the minority shareholders. The original license recieved a 6 month extension and expired in June 2006, followed by a second extension lasting until the end of August, 2007. In December 2007, Zain acquired Iraqna, in a transaction worth US$ 1.2 billion. Subsequently, Iraqna and MTC-Atheer (3055) merged to become a new entity jointly operating under the Group’s new brand Zain.