Internet and e-commerce industry in Iraq
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We are to consider today Internet and e-commerce industry of one of the Arabic countries, located in Western Asia, Iraq. This Muslim country is spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert. Iraq is bordered by Jordan to the west, Syria to the northwest, Turkey to the north, Iran to the east, and Kuwait and Saudi Arabia to the south. The economy of the country is dominated by the oil sector, which has traditionally provided about 95% of foreign exchange earnings.
As for the country’s telecom market, it has undergone much repair and development since the end of hostilities. Until the overthrow of Saddam Hussein, Internet access was tightly controlled and very few people were allowed to go online.
Thus far, the most developed and mature appeared to be mobile sector, with four operators sharing the market. But Zain of Kuwait’s subsidiary Zain Iraq has much the largest market share, with well over 50% share. Actually, boom in mobile sector can be partially explained by the lack of any significant fixed-line market, with infrastructure almost non-existent outside of the capital, Baghdad. There is also a great lack of fibre-optic backbone infrastructure, both nationally and for international connections. With better backbone infrastructure mobile Internet services could probably be successful but as yet 3G/HSPA services are not available.
Since the overthrow of Saddam Hussein, Internet access has become commonplace. At present, the stress is making on developing the network, with the national regulator launching a tender for wireless local loop licenses. The major development has been the establishment and rapid growth of mobile services from a zero start following the award of three temporary mobile licenses.
Several Wireless Local Loop licenses have been awarded and operators have launched services using CDMA networks but they have not as yet made much impact.
The incumbent Internet services provider, Uruklink, used to be the sole Iraqi ISP. However, currently the leading operator faces competition from other ISPs, including broadband satellite Internet access services from both Middle East and European VSAT hubs.
The premier military telecom service provider competing the national incumbent appeared to be TS2, an Internet Provider for US Army soldiers in Iraq and Afghanistan. Despite most of all active TS2 users are Polish and US Army soldiers, the operator’s solutions have been implemented also for private companies and organizations. Before end of 2007 year, the TS2 solutions have been available for numerous NATO military entities. Since 2009 TS2 started advertising satellite Internet services for the US Marine Corps in Afghanistan. At present, TS2′s network in Iraq and Afghanistan has over 15 thousand military users of local broadband satellite connections. TS2 also delivers telecommunication services for Iraq-based Police Transition Teams.
Since 2006 several other companies were launched their services, offering cheaper services and smaller bandwidth affordable for single users such Advanced Technology Systems-Iraq. As of 2010, the top 4 ISPs in the capital of the country operate:
• Rose Telecom, delivering speed up to 4/0.7 Mbps in off-peak times and 512/128 in peak times
• Halasat, offering speed up to 3/0.5 Mbps in off-peak times
• Earthlink, targeting home/single users
• ATS-Iraq, also targeting individual users
Among other ISPs operating on the Iraqi market successfully, according to ostamyy there are:
• Afaq Link Technology – offers communication and Internet services by providing satellite system and wireless services in Iraq.
• Baghdad Telecom – provides infrastructure solutions in the areas of wireless, security and other IT solutions to small, medium and large entreprises in Iraq.
• Nashita – represents a leading ICT US-based ICT Company providing Satellite Internet in Iraq since 1999 and now provides both dedicated and shared VSAT satellite internet service in Iraq.
• Iraq Satellite Internet Services – delivers high-speed Internet connectivity in Iraq with our high-performance Galileo satellite network.
Interestingly, because of the disappearance of phone lines since 2004, all the Iraq’s ISPs uses the Wi-fi Technology to deliver Internet connection. The Iraqis are waiting for the current government to start repairing the phoneline to provide them with the cable/DSL Internet.
Internet access, limited prior to the war, has grown quickly since then due to the availability of satellite broadband access and the opening of Internet cafes. Nevertheless, Iraq has the lowest in the Middle East penetration level, with 1.1% Iraqis connected, as says www.internetworldstats.com. In order to compare, we are to note, that only 0.1% of people in Iraq, or 12,500, were subscribed to the Web. At present, mainly Iraqis get Internet access at Internet cafes with satellite connections.
Internet country code top-level domain (ccTLD) for Iraq is .iq, administered by Network Information Center of Iraq. Registrations are mainly available at third-level domains beneath following second-level categories:
• gov.iq – Governmental entities
• edu.iq – Educational Institutions
• com.iq – Commercial entitites
• mil.iq – Military Institutions
• org.iq – Non-profit organizations
• net.iq – Network Service Providers
Importantly, .iq domain name had previously been in limbo for years, as the delegated manager was imprisoned in Texas on charges of alleged connection to Hamas for which he was later convicted in 2005. Some talk of redelegation and relaunching began taking place at the time of the 2003 invasion of Iraq, and in 2005 a redelegation to the National Communications and Media Commission of Iraq was approved by ICANN.
As for e-commerce sector in Iraq, it’s eventually on the initial stage of its development due to the imperfection of Internet infrastructure in the country.
However, more and more businesses are launching their websites; and business cards are now displaying e-mail addresses.
Besides, there was launched a new Iraqi Business Center that represents a partnership between the CPA and the Iraq Ministry of Trade and provides on-site business counseling for the local Iraqi business community.
The Center is located at the Convention Center in Baghdad and has an informative website at www.iraqibusinesscenter.org, which however, is temporary under construction. The Iraqi Business Center website provides a database of Iraqi companies seeking subcontracts and international partners for work in Iraq.
The sites like this, or some others like, for instance, the US Department of Commerce Iraq Reconstruction Task Force website, target to promote the present and future use of the internet by businesses wishing to do business in Iraq.
Importantly, the US Commerce has one of the best websites for obtaining Internet information regarding business opportunities in Iraq.
An international business center was recently opened in Kirkuk. It is operated between the local government, Coalition forces, the Kirkuk Chamber of Commerce, and the Kirkuk Contractors Union. One of the prevalent goals is to facilitate coordination between local and international businesses and to facilitate unsolicited bids for reconstruction work.
Since 2003 the Central Bank of Iraq has authorized Iraq’s private banks to process international payments, remittances and foreign currency letters of credit. However, national banks are still not offering on-line banking services and transactions. Thus far, Iraqi banks need to do e-business in order to provide security. This would include authentication, data integrity, confidentiality, payment gateway.
As for the e-government page, since 2003 Iraq has been in transition and led by the US Coalition Provisional Authority. Future goals for the Iraqi and other e-governments include a national ID, health care database, and e-voting.
However, some barriers still exist in Iraq for successful e-government deployment. Among them, like in other countries in the region, there are: societal rigidity, weakness in ICT education, unfair income distribution resulting in lack of access to ICT education and technology. Iraq faced brain drain when thousands of Iraqis fled the country or were forced to leave during Saddam Hussein’s regime.
Well, despite this Muslim country cannot boast about the high level of ICT progress and as the result of e-commerce sector development, some good signs of future success in this sphere are obvious.