How do you expect the mobile penetration rate to develop over the next five years?
Mobile penetration rates have indeed increased very strongly in recent years. However, despite its performance over the past decade, the growth in mobile penetration has shown some signs of slowing compared with previous years. According to Data from Altai Consulting, in 2012, the country was home to around 27 million mobile subscribers, witnessing a 5.5% annual increase in subscribers. This is down from 7.6% in 2011, 13.8% in 2010, and 39% in 2008. We expect growth of 28% between 2013-2017, reaching a 110% penetration rate in 2017. This growth will be aided by the availability of 3G broadband, as well as healthy GDP growth in Iraq. Annual GDP growth is expected to average 10.8% from 2010-2017 due to increased oil production, and this ongoing economic growth suggests increased growth in the mobile telecom sector.
What are the similarities and differences between the market in the Kurdistan Region and the market in the rest of Iraq?
Asiacell’s operations cover all of Iraq. We contribute tremendously and broadly to rehabilitating the Iraqi economy. For Asiacell, all areas, urban and rural, are important. Kurdistan, for example, is a big market. However, Baghdad, Basra, Karbala, and Najaf are also key markets for us, in that they are very resource rich. In rural areas, much can still be done to expand our network and make mobile broadband accessible and affordable.
What will the company do to expand its market share?
Zain and Korek are both strong competitors, which is obviously good for the customer. However, it also a positive for Asiacell because it forces us to constantly reinvent ourselves and push the limits of what our technology can do for the Iraqi people. While our competitors are strong, Asiacell is a step ahead. We have had nationwide coverage for many years now, while others are still trying to roll out wider networks. So, we can instead focus on the customer experience beyond providing classic mobile services. This is demonstrated, for example, by our specialized packages like the Almas Line (which caters specifically to women), the Student Line (available to the students of Iraq and Kurdistan), or our A’mali Services (our new commercial brand for complete business services).
Asiacell seems to have placed emphasis on finding innovative solutions and offers for its subscribers, such as the Almas Line (which won a Global Mobile Award this year). Do you think this willingness to think outside the box has been a key point in Asiacell’s appeal to the people of Iraq?
Asiacell was the first mobile operator to have nationwide coverage, the first to pay the upfront license fee in full, the first to provide mobile internet services, and the first to be listed on the Iraq Stock Exchange (ISX). Iraq is moving on at an incredibly fast pace, and Iraqis are expecting to be surprised by new services. We know that things change quickly, so we don’t just sit on our track record. We work hard to maintain our position.
During Asiacell’s IPO in 2013, the company sold all 67.5 billion available shares and was able to raise approximately $1.27 billion. Does the fact that all shares sold out rapidly indicate that the people of Iraq see Asiacell as a strong company and a stable investment?
The IPO was a turning point in our company’s history. Those of us who work “inside the machine,” and are very familiar with Asiacell, had no doubt about the company’s value: we knew it had unique assets, talented people, and fantastic products. However, we were unsure how the market would react to such an IPO taking place in Iraq. We were pleased to see that the response was a loud vote of confidence. Indeed, as a result of the strong showing during the IPO, Asiacell won “The Best Equity Capital Market Deal Award” at the TMT Finance Middle East & North Africa 2013 Conference. Most notably, the public offering was recorded as the largest IPO in the MENA region since 2008, a fact that is an achievement not only for Asiacell, but also for Iraq’s capital market as well.
Looking to the future, Asiacell is expected to offer 3G and 4G services in Iraq. How far along are these plans? Are there obstacles that inhibit the implementation of these technologies?
Iraqis want the 3G experience, and many have experienced it abroad. The availability of high speed, reliable Internet access can play a significant role in Iraq’s economy. Many studies from around the world find a strong correlation between the development of broadband and economic growth. Beyond the current conventional services available for the Iraqi people, there is a great need for innovative services and technologies such as electronic education, distance learning, mobile health, online banking, e-commerce, social media, online training, and many other services. Iraq needs these services for economic and social development. Asiacell is ready to provide this experience and has been working for many months to launch mobile broadband services. We are waiting to be issued a license by federal regulators to serve Iraqis and the Iraqi economy with 3G services.