Iraq’s military conflict at the beginning of this century slowed the development of the country’s telecoms sector. The change in political climate has allowed Iraq and Kurdistan to make impressive advances in this field. However, there is still a long way to go.
Cellular phone company Asiacell was created in Iraq 13 years ago in a competitive marketplace, and today has 9 million clients. By 2009, Asiacell had achieved its target of becoming the first operator to offer services in all of Iraq’s 18 provinces, providing universal mobile coverage across the whole country.
Faruk Mustafa Rasool, Managing Director of Kurdistan-based Asiacell, is fully aware that there remain several key obstacles to overcome before Asiacell can achieve the same status as rivals in neighboring countries. He insists that the government’s policy regarding infrastructure investments must be “reviewed and modified” and gives as an example the limits imposed by the Iraqi government on building fiber optic networks in the country.
“While it does not allow other companies to invest in it, the government’s steps to invest in fiber optic networks are so slow that telecoms operators cannot meet the demand for services that we are seeing,” says Mr. Rasool. “It will make a real difference if trade, investments and any business deal regarding infrastructure (fiber optic networks) are released from government control, and put within a modern and realistic regulation framework, as seen in other countries.”
Asiacell is confident that telecoms progress will continue at an expanding rate. Mr. Rasool points out that “a lot of growth is expected in the large market of Iraq which has a population of over 33 million people.”
He adds: “We’ve seen penetration rates more than double since 2006, when only 34% of people had a mobile phone. We see this as a clear indication that there will be a lot of growth in Iraq. The Iraqi economy generally is one of the fastest growing in the region – between 2011 and 2016, the economy is expected to grow by 6.7% per year, according to Global Insight.”
Mr. Rasool says that the telecoms market expansion rates are slightly above GDP growth rates. The Iraqi telecoms market has been growing steadily at an average rate of around 8% per year since 2006. He stresses that “as the economy grows, we expect the telecoms penetration rates to rise too – telecoms is a vital part of the country’s infrastructure which supports the growth of the economy generally.”
But another handicap in Iraq’s telecoms potential is the almost total lack of broadband services. “Until now, Iraq has had no broadband services,” says Mr. Rasool, adding that broadband service penetration in Iraq is less than 1%.
“That shows investment and growth is expected in Iraq’s future broadband business. There is no real broadband without a reliable fiber optic network. So, a fiber optic network is also the precursor to any successful rollout of broadband in Iraq, which is a vital ingredient for the growth of any economy,” Mr. Rasool stresses.
He says that another way to improve the region’s telecommunications infrastructure is to develop 3G services together with broadband. “Iraq is one of the few countries left in the world that does not have broadband services and solid 3G licenses, and we have to play a very big role in developing these.”
How does Mr. Rasool explain Asiacell’s success within such a difficult sector that is crippled by its very limited fiber optic network, broadband services and 3G licenses?
“Not everything has been calculated in terms of numbers and math – we are a company that takes care of the emotional part of our business,” he says.
“Our field is communications, and communications is about people. We want to enrich people’s lives and experiences through the communication services we provide. We are very close to our customers – we truly listen to them and deliver services they want,” Mr. Rasool adds.
“As a result, we have reached a harmony between the business, our consumers and our employees,” he says.
He regards Asiacell’s commitment to serving people, its employees, and making the most out of its investments, as three areas that have strengthened the company.
“When you carry the motto of ‘commitment to serving people’, it means something crucial,” says the managing director. “It means there is a comprehensive vision and a wise strategy. You have to invest and go further, serving everyone including rural areas – inhabitants of mountains and deserts, as well as the major cities”.
Mr. Rasool thinks the main reason for Asiacell’s success in gaining 9 million customers is that “we really care for our customers and make every effort to give them an excellent experience. We also set out to offer our customers the best quality services using the best mobile technology available. Our customer services teams really help us to differentiate from our competitors.”
But at the same time, understanding the policies of competitors, including internal competition as well as that coming in from abroad, is key to planning a future strategy.
Mr. Rasool says, “we are competing with OTT (Over The Top) suppliers, and vendors like Facebook, Google and Whatsapp. All of these companies are now competing with national operators. Whatsapp or instant messaging, for instance, is affecting SMS revenues hugely in some countries. We hope that this competition will result in better services and reasonable prices for customers, but we do not want to destroy our values. If revenues decline dramatically, then the network will be affected.”
Mr. Rasool says that “OTT players like Skype, Whatsapp and Voice Over Internet Protocol (VOIP) will not substitute the providers in any country, but they can complement them. So we need to think about competition in this regard.”
“We need to make sure that the people working for us are comfortable and satisfied, and that they gain financial rewards and feel part of the Asiacell team spirit. We are not Google, but we are one of the best, if not the best, in Iraq,” concludes Mr. Rasool.