Fergie's Tech Blog

For Sale: Iraq's Cell-Phone Franchises

W. David Gardner writes in TechWeb News:

The licenses to operate Iraq's three cell phone companies are running out and potential new operators are assembling in the United Kingdom this week to sort out the risks and rewards involved in what is one of the world's most dangerous, but lucrative business opportunities.

The risks are clear. Employees at the three existing Iraq cell phone operations have been kidnapped, according to published reports, and U.S. military forces have had to jam service to prevent insurgent cell phones from detonating bombs along convey routes. But the operations are profitable and offer unbridled growth possibilities to companies willing to take the risk.

"You can actually make handsome returns in Iraq despite the risks," said Jonas Lindblad of Pyramid Research in an interview Wednesday. "There's a lot of money chasing around a few deals in the [Middle East] region. In one way or another, they are linked to oil money." Lindblad, senior analyst Middle East for Pyramid, believes the initial licensees probably have already made money on the existing franchises.

"This is a very rare occurrence--three brand new, fresh licenses," he said, noting that cell phone services and infrastructures have been built in most populated parts of the world. Saddam Hussein had banned cell phones, but after his demise three monopoly cell phone licenses in separate regions were awarded.

posted by Fergie @ 7/27/2005 11:26:00 AM