Telecommunications companies in Iraq …. An integrated system of corruption

Telecommunications companies in Iraq …. An integrated system of corruption

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The  communication and mail services in Iraq were available too early, where the Internet was used by centers or by telephone modem and wireless communications in a narrow range , but in the field of the  state earlier. As the Thuraya phones  associated with the satellite were used  prior to 2003,it was the only  reliable means, but it has been experiencing some of the determinants of the spread, since it is expensive for citizens where the  salaries  of the most of them  were  under $ 150 a month, in addition to the device costs $ 600, and  the  cost of connection to  up one dollar per minute on average.

After 2003  the Internet and wireless communications  have  entered  to Iraq in a wide range  and have become accessible to everyone, where there are now many Internet service providers via satellite, and  at the same time the number of subscribers of landline phone lines are increasing in Iraq , which amounted to about one million and a half million subscribers, and mobile phones about 14 million users.
New technology is the driving force behind the rapidly changing workplace. the means of communication  are the most prominent secretions of modern technology , which has proven  for its effective role in moving the wheel of development in other fields of life, but   in Iraq , the companies working in the telecommunications  sector  were dominated  by corruption and greed ,  the  Undersecretary of the Ministry of the environment Jassim al-Falahi said  (1) in an interview on the sidelines of the national conference held by Women journalists without borders and human rights organizations in the Middle East under the motto of (mobile phone companies hit the environment  ) in Palestine hotel  in the center of Baghdad , ” the ministry noted the widespread and significant expansion of the towers of  mobile phones among the residential places  and alleys and near schools , health institutions , despite the existence of controls and limitation s that prevent it. ”
Al-Falahi added,” The mobile phone companies did not respond with instructions and legal controls to  install  its towers  and  they have been  notified  more than once about the environmental standards of the determinants of these towers and standards of  frequencies to be used but it did not respond to us ” .
legally (2) the legal expert Tareq Harb explained on 13 / November / 2014 that mobile phone companies contracts were  signed away from the provisions of the law, and stressed that those companies were  paying  billion and a quarter of a billion to the government in 2007, calling for the increase of the amount  of the contract in 2014 because of the increasing number of subscribers, whose number were five million subscribers , and in 2014  the number  was exceeded  of  25 million subscribers; and Harb stressed  that the signing of a contract with the telecom companies for 15 years is the “monopolistic issue.”
A member of the legal committee in the House Representatives from the bloc  of Fadhalah Hassan al – Shammari pointed out that the the signing of the CMC  of the contract for the use of third -generation frequencies with the  telecommunications companies  is a  violation of the law and a large waste of public money  calling on the prime minister to stop the contract and check its legality, and the CMC should be abide by the law (2).
Al-Shammari ” added  the waste of public money is  that the financial revenue due to be paid  by the three companies: (Asiacell   ,Zain, Cork) combined to the public treasury of the state is  too little  and it is amounted   (921) $ million for the next seven years , ” pointing out that “this represents a tremendous loss  to the right of the State compared with the huge profits earned by the companies and to clarify  by the figures, and according to data announced by the companies about what  they get from the profit rate monthly, and the increasing number of subscribers spread over the three companies and the majority with the Kuwaiti company “Zen” and the rate of profit “12” dollars a month for each subscriber for  the service of Contact only without profits of  messages, advertisements and Internet . ”
and according to al – Shammari  , the total  minimum of the profits that may be obtained by  companies amounted  (three billion and 456 million dollars) for an amount not up to one billion paid to the state, adding that it is  not paid immediately, but within a year and a half year, adding that “it will not cost companies any amount for its own account and will pay it from  the profits to be reaped in one year.”, in addition to poor service and high prices.

Tariq Harb , the legal adviser pointed out (3) that the contract was for a long time of 15 years and amounting to one amount that does not change and paid by companies to the government in spite of the expansion in employment and the increase of  the number of phones, and that the amount in the contract which was paid in 2007  , it  was the same as the amount they paid in 2015 and  the contract will continue  itself  into the year 2022, noting that this contract did not guarantee the rights of the state, and the rights of citizens from the arbitrariness of those companies.
and the expert explained  that after the transfer of sales tax imposed on telecommunications companies to Purchases tax scheduled to subscribers , the ministers and heads of agencies in 2007  did not notice the  guaranty of the  rights of the state and the people  in front of those companies!
the matter has been presented before the administrative judicial Court , which judged that no right to the communications and media Commission to proceed with the signing of the contract,  but despite  with all of this the corruption continued and became spread like wildfire in the absence of monitoring and accounting for private sector companies operating in the country especially the telecommunications companies which exploited the exceptional circumstances in which we live to make outrageous profits on the poor citizen ‘s account.
the  parliamentary committee for services  and construction   revealed  that  the mobile phone companies operating in the country , “Zain Iraq, Asiacell, Korek” took advantage of the citizen in  the ugliest way when applied settling accounts system in seconds since 2011, asserting that thefts  by Using this system have been disclosed to the eyes of those responsible destinations  (4)
A member of the Commission on the national list , Dr. Sabah al – Tamimi said : these companies applied the system and its application  was entitled  that it is for the benefit of the citizen to afford wages of  actual call and not wage of a full minute for its parts , “seconds of them,” in addition to  that this method of calculation was referred to in the license contract.
Al- Tamimi added, “this  system  rather than to be for the interests of the citizen , it  became a curse upon him  that he is bearing amounts  to exceed  the ones   which were borne  according to the system of  minutes ,  as a result of clear error in the application of this system  , ” indicating that ” the error was  in the fixing  of   the per second rate by 2 Dinars  for a call    within the network and four dinars abroad, while it was supposed  that the  minute  rate  to be divided according to the seconds system  to 60 seconds; to  fix the per second rate. ”
Al- Tamimi  pointed out  ”  as a result of this procedure ,  the minute rate has become within the network  according to the payment  system in seconds  120 dinars after it was 90 dinars according to the minutes system ,  that  means  the increase is 33.3% and borne by the citizen, while the per minute rate  outside the network ,  was up to 240 dinars after it was 110 dinars of the  minutes system noting  a difference of 118% , and this increase is borne by the citizens as well , “indicating that in a” simple mathematical equation  , the number of minutes offered by shipping card with 10 thousand dinars credit  to the call outside the network according to the system of  minutes  is equal to 90 minutes while the number of minutes provided with the   same credit according to the  the existing  seconds system , which is 41 minutes in the sense that the number of minutes that the citizens lost from the  credit of  the  shipping  card from 10 000 dinars a class is 49 minutes and the remaining to him 41 minutes out of 90 minutes , in the sense that  the loss ratio in the credit is  equal of 54.4 percent of the total  credit. ”
the same source added that the role of the commission of  media and communications is the regulatory and supervisory and  monitory    to serve the interests of citizens , but  this error was not corrected and continued to  burden the citizen these amounts from the date of application of this procedure, and  Tamimi  warned that ” the budget law , which added 20% of the sales tax on shipping cards to make the citizen is the first loser , as  his loss of  credit  has become  by 3.62%.”

At the same system of  revealing the corruption  , the parliamentary finance committee member Haitham al – Jubouri noted  to  the presence of great  theft and corrupted files  in the CMC, news conference (5)
and that corruption and irregularities with respect to increasing the profits of telecommunications companies amounted to 250% after it  replaced the system of calculation from  minutes   to the seconds , adding that profit realized comes to the account of fooling  of  the ordinary citizen .
Among the  forms of corruption in this sector that the media and communications made the work  monopolized on the three companies , namely: (Asia Seal company,   Zain  and  Cork )  based on several arguments , including the risk of  working in Iraq  and  being  to provide an inexpensive service to the citizen and being offer  the cheapest bids, and to replace them is a waste of time! And  If we compared with companies in other countries to have seen that it  provides 7 times to  the service of  other countries.
al – Jubouri  pointed out  that the service’s 3G contract does not contain a clause allowing the three companies (Asia Seal, Zain, and Cork) to have   a monopoly of any round of new  licenses, stressing that the Commission has a monopoly  of the service for  them!
the chairman of the commission  justifies that the mentioned  service , give privileges to citizens we do not want that  citizen  to lose those  advantages , there are serious risks if we have introduced new companies and this is a waste of time, but reality shows that those arguments  are  flimsy as the introduction of a new corporate prevents the market from monopoly to competition  increasing the  diversity , offers and services provided to the customer and become competitive prices  for the benefit of the citizens, and increase the state revenues  from these companies, while a 3G price in Morocco 1 GB = $ 2 , it has in Iraq , $ 15.
He added that all the trustees  of the Authority signed on  the dismissal of head of the Executive of the authority and for 8 months from the date above and  the government ‘s approval  has not been done on the dismissal  at that time .

The  parliamentary  economic and investment committee  called on the  Communications Commission to prepare a paper on reforms to the work of the mobile phone companies. (6)
the committee member Abdul – Salam al – Maliki  revealed in  a news conference in the presence of a number of MPs ”   the violation of companies to a clause obliged it to invest  up to75% of its imports in projects within the country.”
He disclosed that the mobile phone companies, take over a large share of the revenues of the country, as: “sap a day  worth  to 15% of the oil revenues by communication service, without the state to learn the fate of these amounts also revealed:” the participants in these companies amounted to millions also revealed that the amount of money transferred by those companies out of the country, exceeded seven billion dollars , which was supposed to be the ones accounted for 75% of investment within the country .. the equivalent of almost $ 5.5 billion and to ensure the commitment of those companies to  the terms of the agreement signed  with it and by the formation of specialized committees to undertake to put the accountability mechanisms to ensure no recurrence of such manipulations ” .
al – Maliki , a parliamentary member called on  the communications Commission and  the  monitory  authorities to “apply all the terms of contracts for mobile phone companies and internet  retroactively for all years, and that is forcing these companies to pay what is in its receivables of funds and dues, otherwise the concerned authorities  have to cancel their contracts and compel it   to abide by  the punitive clause , and contracting with  other companies  of more  credibility and professionalism. ” All of this reveals that the mobile phone companies, take over a large share of the revenues of the country.
It is worth mentioning , and also that the document (7) states that some countries that its national companies   have implemented  the  mobile phone project, and   having  operated   the first networks  ,taking advantage  from it  on the sale of a second license  with a huge amounts  achieved  good revenue for its coffers  for example: sold  to Sudan the second license of $ (150) $ million and Algeria  with  (735) $ million, Tunisia  (450) $ million, Morocco  (1.1) $ billion, Turkey ( 2.5 ) $ billion, Austria (1) $ billion, and England (2) $ billion.
In the Kingdom of Bahrain , the telecommunications was a state  company and then became a public company  and Iran entered into an agreement with an Iranian company to develop a network of (Shat), operate  , and develop it and cover the whole of Iranian territory to strengthen its center and support the price before selling part of it.
while the United Arab Emirates is  still a state – owned company  that it did not sell any license  yet noting that the the profits of the UAE ‘s telecommunications company has reached  of the last six months (388) $ million, and the  Maroc telecom  company  achieved  annual profits for the last year amounted to $ 650 million.
Iraq has  to make the project  of a mobile phone services  Iraqis  as the first non – oil project  that generates national funds to the treasury of Iraq in which the county  take advantage from it  for the construction of Iraq, but Iraq also   as it was pointed out  by the last investment Law  ,  was offered for sale publicly and privately.
In conclusion , it is necessary to confirm the interest in this sector, as it has real importance, Iraq can maximize its revenues  through it , and that makes it    a companion with the oil sector or contributor with it to a large extent, in the country ‘s development, but  in the beginning , it must to stand firm  in the face  of   corruption that rive it  to the bone , and the development of plans and laws and the necessary legislation and work hard to implement, this sector to be able to perform the role it  is hoped from it, to contribute to the achievement of a fair revenue to meet development needs, and to provide adequate service to the citizen  that meets  his aspirations.

Shatha Khalil 

Translated by : Mudhaffar Alkusairi

Rawabet Center for  Research and Strategic Studies