The Iraqi government wants to sell off a fourth national mobile phone licence by the end of this year. It would like to raise an estimated US$2 billion from auctioning the licence during 2011. The government also proposed rules for ownership of the licence. According to Reuters, communications minister Mohammed Allawi said: “What we have decided about the fourth license is to divide it into three main shares”. He proposed 40 percent of the shares in the licence be allocated to a privately-owned operator, 35 percent to the public and 25 percent to the ministry of communications. The country’s three existing operators each paid US$1.25 billion for their 15-year licences in 2007. This is not the first time that the Iraqi government has talked about licensing a fourth mobile licence. There has been speculation on this subject at least since 2009. Various possible bidders for a new licence have been mentioned. Most recently Verizon, MTN, Turkcell, Etisalat, France Telecom and Vodafone were suggested as candidates at the end of last year.

Iraq’s existing operators have already made significant inroads in terms of penetration, so raising the bar for any newcomer. Market leader Zain has over 12 million subscribers followed by 8.13 million subscribers for nearest rival Asiacell, according to Q4, 2010 figures from research firm Wireless Intelligence. The third national licence holder is Korek Telecom which primarily operates in the Kurdish region of northern Iraq and is much smaller than its two larger rivals. There is also another operator, a regional player called Sanatel, which has a smaller number of subscribers. The research firm estimates that cellular penetration in Iraq was 70 percent in Q4 2010, making for a competitive market for a new entrant.