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FEATURE STORY

Business Models for Improving High-Speed Internet Access in Iraq

October 29, 2014


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Aerial view of a neighborhood in Baghdad.

Josh Rushing/flickr

STORY HIGHLIGHTS
  • Broadband take-up in much of the Middle East and North Africa region has been slow largely because the market has been structured to a past when telecommunications were treated as a monopoly
  • All too often, broadband internet is still viewed as an easy source of government revenue; opening up the market could provide the economy extra stimulus, giving young people more opportunities
  • Iraq’s health and education sectors could both benefit from reliable broadband links

Affordable and reliable internet access has become an economic necessity, akin to other basic utilities like electricity and transport.  A recently published World Bank Group report, Broadband Networks in the Middle East and North Africa: Accelerating Access to High Speed Internet, indicates that only 6.7 percent of Iraqi households have access to the internet via a fixed broadband connection. In light of this reality, the Bank’s Transport and ICT Global Practice organized two workshops on business models for improving broadband access in Iraq.

In Iraq, like in many other countries, the main challenge is not infrastructure. A nationwide network of fiber-optic cables has already been deployed. Instead, the challenge is linked to the market’s failure to create incentives and opportunities for the operation of and access to these networks. Broadband take-up in the region has mostly been slow and its cost, high, says the Bank’s report. “In large part, this stems from market structures that, too often, reflect the past when telecommunications were treated as a monopoly utility service.”

Broadband assets are still viewed as a source of government revenue in Iraq and many other places. Iraq’s Ministry of Communications is working hard to develop effective strategies that can help improve access to high-speed internet as broadband is the internet link in highest demand. However, many layers of loosely regulated internet service providers are all answerable to the government’s monopoly on cross-border connectivity. As a result, some Iraqi private sector players find it difficult to expand. “We have more than 300 ISPs, all of them working without regulation…this issue [is] affecting the service,” said a representative from a leading Internet Service Provider in Iraq.


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Iraq Broadband Workshop participants


World Bank Group


The Bank’s workshop in Iraq provided a chance to move towards a middle ground. As highlighted in one of the presentations, regulatory reforms could encourage competition, cut prices and improve service without jeopardizing the financial position of government-owned broadband assets. Open access and the enforcement of agreements on operating fiber-optic networks could help Iraq increase its broadband footprint.   

“Before building bridges and roads we need to build the Iraqi citizen and increase his or her scientific qualifications,” said a representative from the Iraq’s Communications and Media Commission. “Equal opportunities between all players in Iraq’s media and telecommunication sectors are crucial [for this].”

In November, the Bank will be organizing another workshop to discuss Iraq’s draft telecom law. Passing this law would be vital for the broadband sector. This would clarify the different legal jurisdictions of the central government and of local governments, and provide a framework for public–private partnerships.

In summer 2013, the Bank initiated a discussion that highlighted the importance of public-private partnerships (PPPs) in extending broadband access to underserved areas in Iraq. Best practices from European Union countries show that the public sector has an important role in incentivizing and organizing such interventions. Broadband services in rural areas can be done cheaply by capitalizing on the untapped fiber-optic capacity in non-telecom sectors such as electricity transmission lines, railways and petroleum pipelines. In addition, rights-of-way regulations could be issued for urban areas so that private providers can use the fiber optic cables locally.

The World Bank Group will continue to work with all stakeholders in Iraq’s broadband sector, where the potential is enormous.  About 60 percent of Iraq’s population is under 25, some 20 million people. This means that a whole generation is growing up in an era of global connectivity. Imagine the impact they could make — economic, social, educational, scientific — if every one of them had access to broadband.

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