MTC In Iraq

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MTC Group, the Middle Eastern telecom company, is an interesting operator to watch — the company recently launched several SMS-donation campaigns for the people of Lebanon. The PR strategy/philanthropy is a typical move of CEO Saad Al-Barrak, a passionate telecom wild-catter running networks in the Middle East, and Africa, and even Iraq. A few months ago I got a chance to talk to Dr. Al-Barrak on the phone about his plan to be the biggest operator in the Middle East and beyond. At the time he was getting ready for a trip to Chicago to meet with infrastructure partner Motorola.

The company took a big risk on building an Iraq network and spent $430 million on the effort, including $20 million alone on security. Those funds are to help combat things like daily bombings, kidnappings and the horrors of running telecom services in warzones. In Iraq, Motorola’s contract with MTC is estimated to be worth $170 million, and MTC is already seeing suprisingly high growth and earnings from Iraq. For the first half of 2006 the company reported it already has 2.09 million subscribers in Iraq, up 263% from the year before.

Given U.S. bombs wiped out much of Iraq’s landline infrastructure, cell phones are the best means of communications. There’s been a lot of problems with transparency and telecom contracts in the country, and there’ll be even more problems as the country tries to issue new cellular licenses. But companies like MTC, that already have a toe-hold in, could make even more money if/when the country stabilizes.

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