The Vodafone deal represents a significant departure from plans announced in 2022 to create a state-owned telecom operator and opening up worries that this could undermine Iraq’s ability to maintain control over a key strategic sector. [Getty]
The Iraqi government‘s decision to award Vodafone the contract to build its national 5G telecommunications network has sparked fierce debate, with critics questioning the transparency of the process and the sudden pivot away from plans to establish a state-owned telecom operator.
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— Government of Iraq – الحكومة العراقية (@IraqiGovt) November 26, 2024 “>Announced late Tuesday by the Council of Ministers, the decision entrusts Vodafone with a project aimed at modernising Iraq’s long-criticised communications sector, which suffers from slow internet speeds, high costs, and limited rural coverage. Yet, lawmakers and industry insiders argue the deal lacks legal and procedural clarity.
“The Council of Ministers has approved the selection of Vodafone as the operator for the national mobile licence project utilising 5G technology,” the government said in a statement, tasking Communications Minister Hayam Al-Yasiri with preparations for the project.
Defending the choice, Al-Yasiri cited Vodafone’s global reputation and expertise in 5G technology. “The ministry had invited 22 international telecom companies to express their interest in the project,” she said in a statement to the Iraqi News Agency (INA). “Several companies declined due to security concerns in the region, but Vodafone expressed willingness to operate in Iraq.”
She added that Vodafone was selected based on specific criteria, including its brand reputation, revenue, subscriber base, and 5G experience. “Vodafone met the selection standards due to its expertise and success in 5G markets worldwide,” Al-Yasiri said.
However, Vodafone itself has not confirmed the agreement. A spokesperson, who asked not to be named, said to The New Arab, “Vodafone’s partner markets division is in talks with the government of Iraq about a possible consultancy contract to advise on the design of a new 5G network planned by the government. Discussions are still ongoing, and we do not yet have an agreed contract.”
The spokesperson emphasised that Vodafone’s partner markets division works on a “non-equity basis” with telecom businesses worldwide, helping them grow and develop.
Lack of transparency
Lawmakers and industry insiders have serious concerns about the process of Vodafone’s selection.
Karwan Yarwaise, a Kurdish MP and member of the parliamentary Communications and Media Committee, said his committee was not informed about the criteria used to select Vodafone.
“The project was slated to be a national operator for operating the 5G services, but it has not been given to a national company and was awarded to a foreign company without any announcements for bidding and competition for other companies,” Yarwaise claimed to TNA. “The Iraqi government has settled all negotiations and contracts during one meeting. This is not a good decision and creates suspicions on the cabinet.”
Yarwaise criticised the government’s reliance on direct invitations for awarding contracts, saying, “The operator should have been a national one, and there should have been announcements and offerings for competition to choose the best company in terms of services and financial capacity.”
He added that the government should have sent a bill to parliament to establish a national telecom operator, which could have been approved before launching the project.
Yarwaise noted that the government’s actions might be legal but suggested at least “legal suspicions” over the procedure. He said his committee would discuss the issue in parliament and invite relevant authorities for questioning.
Industry pushback
Iraq’s three existing telecom operators—Zain Iraq, AsiaCell, and Korek Telecom—have yet to announce any formal statement.
An official from one of the companies, speaking anonymously, said to TNA, “The step by Iraq’s government is unlawful. Establishing a fourth telecommunications company should have been done via passing a law from parliament.”
The official added that the three operators have exclusive rights to mobile services in Iraq under licences renewed until 2025 and are currently testing their 5G capabilities. “We are preparing to operate 5G networks soon,” the official said.
TNA also contacted the spokesperson for one of Iraq’s three telecom operators, but the official declined to comment, stating that they might release an official statement “if the issue is related to them.”
The Vodafone deal represents a significant departure from plans announced in 2022 to create a state-owned telecom operator and opening up worries that this could undermine Iraq’s ability to maintain control over a key strategic sector.
Lawmakers such as Sarwa Abdul Wahid, head of the New Generation bloc in parliament and a member of the Integrity Committee, have expressed concerns about on this point. In a post on the X platform, Abdul Wahid condemned the lack of competitive bidding and questioned the minister’s trip to the UAE to discuss the contract.
“The selection of Vodafone without a public tender or competitive bidding, and the minister’s trip to the UAE to sign the contract, raises serious legal and procedural concerns,” she wrote.
While Vodafone’s expertise in 5G technology could address Iraq’s longstanding connectivity issues, the controversy surrounding the deal threatens to overshadow its potential benefits. Parliament’s Communications and Media Committee is expected to launch an inquiry into the decision-making process, adding to the mounting scrutiny facing Al-Sudani’s administration.
