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Asiacell and Korek, Kurdistan rivalries play out on
cellphones
26.11.2007
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November 26, 2007
SULAIMANIYAH, Kurdistan region 'Iraq',
-- Like many Iraqi Kurds, Kawa Hassan must carry two
mobile phones. One is for staying connected in this
Kurdish city where he runs an art gallery. The other
is for talking to his girlfriend in Erbil, the
capital of Iraqi Kurdistan 100 miles to the north.
Customers of the two Kurdish networks can call the
rest of Iraq and abroad, but they can't call each
other.
The two companies, Korek Telecom and Asiacell
Telecom, have fought hard to keep it that way. They
split Iraq's autonomous Kurdish enclave into two
hostile cellular ministates, damaging the notion of
Kurdish unity trumpeted by the region's leaders.
With U.S. backing in the 1990s, Iraqi Kurdistan won
self-rule from Baghdad. Soon after, civil war broke
out between the two dominant Kurdish factions. They
have since declared an end to their old rivalries
and formed a joint government, but the two parties
are still reluctant to relinquish much control.
There are two defense ministers, two interior
ministers and two finance ministers. "When they
speak of a unified Kurdistan, it is a big lie," says
Asos Hardi, a newspaper editor in Sulaimaniyah.
Nowhere is the division more jarring than in
cellphone service. At the offices of Iraqi Airways
here, managers can sell tickets to flights leaving
only from Sulaimaniyah, not from Erbil. The reason:
They can't reach their colleagues by mobile phone,
the preferred means of communication in a country
with bad fixed lines. |
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The split stems directly from the rivalry between
the two Kurdish parties: the Patriotic Union of
Kurdistan (PUK), led by Iraqi President Jalal
Talabani; and the Kurdistan Democratic Party (KDP),
led by Massoud Barzani, who is president of the
Kurdistan autonomous region. Both fostered rival
carriers when cellphones first came to Kurdistan. www.ekurd.net
For years, Asiacell and Korek wouldn't connect calls
between the two networks and wouldn't allow each
other roaming rights. Korek has been pressing
Asiacell for a roaming deal, but Asiacell says its
license from Baghdad bans the company from allowing
unlicensed operators to roam on its network. The
Kurds are unlikely trailblazers of the Iraqi
cellphone market. In the 1990s, when mobile phones
were unheard of in Iraq, Kurdish businessman Faruk
Mustafa Rasool began smuggling components of a
cellular network across the mountains into
Kurdistan.
Crates carrying switches were intentionally
mislabeled to fool the customs of the neighboring
countries who were enforcing a trade embargo against
Saddam Hussein's regime. "Nobody believed I would
succeed," Mr. Rasool recalls. The ragtag operation
would eventually grow to become Asiacell, making Mr.
Rasool one of the region's richest men.
The son of an imam, Mr. Rasool had an unconventional
career. For years, he lived in the mountains with
Kurdish guerrillas battling Mr. Hussein's army. He
joined the Communist Party and says he was
considered leftist even by his party comrades. "In
the old days, we didn't believe in money as
motivation," he recalls.
That changed when Mr. Rasool, fed up with politics,
went into business in the late 1970s. He brought
automated slaughterhouses to Kurdistan and dabbled
in construction. His cellphone business was
supported by the PUK, the Kurdish party that
controls Sulaimaniyah. "It was very important to
build a connection between ourselves and the rest of
the world," recalls Noshirwan Mustafa Amin, a former
member of PUK's leadership.
To reward Mr. Rasool for his risky venture, the PUK
gave him an exclusive license to operate in
Sulaimaniyah, the city under the party's control.
PUK members also took a stake in Asiacell, though
exactly how much remains in dispute. U.S. officials
believe the PUK may control as much as 20% of
Asiacell, while Mr. Rasool says PUK members own no
more than 3% of the company. Across a mountain ridge
in Erbil, the city under control of the rival KDP, a
similar experiment was taking root. There, a nephew
of KDP leader Massoud Barzani was also starting a
cellular service. He named it Korek, after a famous
Kurdish mountain. www.ekurd.net
Keeping the cellphone signal alive in the rugged
mountains was a huge challenge that required dotting
the landscape with extra towers. KDP gave Korek a
monopoly to operate in Erbil and another Kurdish
province under the party's control. Asiacell's Mr.
Rasool says he helped Korek procure the cellular
technology and insists Asiacell was the first
service provider in Iraq. Korek officials dispute
the account and say Korek was the true pioneer. Both
companies continue to claim to be first in their
promotional materials.
After Mr. Hussein was toppled in 2003, the U.S.
occupation authorities granted three mobile licenses
to cover Iraq. As the only two incumbent operators,
Asiacell and Korek both wanted a license. Asiacell
prevailed, an outcome that has left Korek bitter to
this day. (The other two companies that won licenses
are Iraqna, a unit of Egypt's Orascom Telecom
Holding; and MTC Atheer, part of Kuwait's MTC
Group.) Armed with the national license, Mr. Rasool
took Asiacell national. Its service is now available
in Baghdad and other cities. Asiacell built towers
in Erbil, too, thinking its national license would
allow it to operate anywhere in Iraq.
Mr. Rasool dispatched Othman Faraj to serve as his
representative in Erbil. The two had met in the
1990s when both were running chicken
slaughterhouses. Mr. Faraj set up shop behind a
grimy red sign reading "Asia Telecom." On Oct. 4, he
flipped a switch, and Asiacell's signal went live.
Within four hours, the local ministry of
communications dispatched two police officers who
escorted Mr. Faraj to the control room and asked him
to turn the signal off.
"They set up towers without permission and kept
trying to switch them on," says Nawzad Junde,
Korek's managing director. The local communications
ministry says Asiacell can't operate in Erbil,
because it doesn't have a local license. Korek
itself has strayed from its home turf. Last year,
the company plunked down a tower in Baghdad's
International Zone. Korek also has been trying to
make inroads on Asiacell's home turf. There, a small
company called Sanatel had challenged Asiacell's
monopoly, only to face intense pressure from
Asiacell in local courts.
In 2005, Korek struck a roaming deal with Sanatel,
which gave Korek a foothold in Sulaimaniyah. Like
many others, Mr. Hassan, the art-gallery manager,
signed up with Sanatel so he could reach his
girlfriend in Erbil. Asiacell was outraged. A few
months ago, plainclothes gunmen showed up at one of
Sanatel's towers, attacked the guards, and turned
off the signal, says Rebwar Khan, a Sanatel manager.
Mr. Khan is convinced Asiacell was behind the
attack. Asiacell denies it was involved. "We don't
have gunmen," Mr. Rasool says. www.ekurd.net
In August, Iraq's central government auctioned off
three new national licenses. With neither prepared
to lose, Asiacell and Korek helped bid up the price
to a mammoth $1.25 billion and snatched two of the
permits. The third went to the Kuwaiti operator MTC
Atheer; Iraqna withdrew from the bidding. The
license terms obligated the Kurdish companies to
hold talks on connecting their long-divided
networks. They hope to link their systems on
Saturday, a breakthrough eagerly awaited by their
customers.
On a recent day in his art gallery, Mr. Hassan
fumbled with his two handsets and complained about
the petty rivalry. To stay in touch with his
girlfriend, he had to buy a second phone and pay new
subscription charges, which puts a big dent in his
monthly income of $200. In carving up Kurdistan, he
says, "the companies didn't take the interests of
the people into consideration."
wsj com
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