- The decision to extend the license came as a legal entitlement under the license contract under Article (6) of the license contract.
- The decision to operate 4G services is a step towards the right direction for the development of the sector and came after long-await.
- Extension of an additional 8 years will be a major challenge in securing returns on investments.
- The established price is the highest compared to the countries of the region and the world.
Zain Iraq welcomed the government's decision on extending the license and granting approval to operate 4G services in Iraq early next year in 2021 and stressed its readiness to operate its advanced network and deploy it to 4G-LTE services in all of the provinces of Iraq.
The company has indicated that it promises its subscribers a great and fast experience in the Middle East in cooperation with its partners for global technology suppliers approved for the latest technologies and solutions such as Swedish Ericsson, Huawei, and Nokia.
In the same context, Zain Iraq indicated that the period granted for the extension of the license for an additional 8 years in exchange for the deployment of 4G services will be short and will be a major challenge in securing the rates of returns on investments during the specified period since at the global level, almost all countries issued 4G licenses for 15 years at least, and some of them 25 years.
This decision comes in light of the decline in the Iraqi telecom market since 2013 by more than 40% due to the unstable situation in the country along with the challenges that the market suffers from in Iraq.
This has burdened the sector and was also a factor influencing the low rates of return on invested capital for the previous period where the rates of returns on investment in Iraq in the telecommunications sector ranged from 5-6%, which is the lowest compared to companies operating in the region.
The company explained that the price set to extend the license and give approval for the fourth generation operation is the highest compared to the rest of the countries in the region and the world where countries with the low gross domestic product tend to offer the fourth generation networks at lower costs to telecommunications companies, to stimulate the pumping of investments in the networks sector and pay credit data.
While in the Iraqi market, the launch of the fourth generation network will lead to spending huge amounts of money and additional operating expenses to purchase Internet from the Ministry of Communications in large amounts to expand the capacities, which are important and essential expenses for providing high-quality communication and data services.
At the same time, despite the points mentioned, the CEO of Zain Iraq, Mr. Ali Al-Zahid, affirmed Zain Iraq’s commitment to complete the obligations and requirements for launching the commercial service for the fourth generation technology with the latest internationally approved technical issued at the beginning of next year as the text stipulated and added, “We promise our subscribers a wonderful experience with 4G- LTE services on par with the very best in the Middle East.”
The company also confirmed its commitment to implement all the provisions of the government decision and the payment of all dues and expressed that the development of the telecommunications sector is a responsibility and commitment thereof and in cooperation with government and regulatory authorities represented by the Media and Communications Authority and the Ministry of Communications.