Rebuilding Iraq: Europe Pushes Own Agenda for Wireless

Europeans may have opposed the war in Iraq, but European companies are angling to get a piece of the action there now that the fighting has stopped. Nowhere is the battle shaping up to be more fierce than in the decisions over the construction of a wireless telecommunications network in war-ravaged Iraq, a country roughly the size of California. And when it comes to wireless standards, European companies may have the edge.

The wireless push toward Iraq pits European telecom carriers that use the standard known as global system for mobile communication (GSM) against U.S. companies using the CDMA (code division multiple access) standard. (Europe also has more experience with GSM than Asian equipment makers.) Telecom analysts and European equipment makers stress that GSM technology, which was developed in Europe, would be easier to install and more effective in the region. “GSM makes sense because it’s the predominant technology in the Middle East,” says Jason Chapman, a mobile infrastructure analyst at the London office of Gartner. “The fact that the main [GSM] players are European understandably raises concern in the U.S., but it would have to be GSM for the good of Iraq.”

The U.S. government has started awarding contracts for Iraq’s reconstruction and appears to favor American companies so far. The House of Representatives went so far as to pass a measure barring French, German and Russian companies from winning business in Iraq after the war. That measure did not become law, but anti-European sentiment persists. In March, Rep. Darrell Issa (R-Calif.) stirred controversy by drafting a bill asking that the government use the U.S.-developed CDMA standard in constructing Iraq’s wireless network. Issa expressed concern that if GSM technology were chosen in postwar Iraq, much of the equipment could come from France and Germany, as well as Finland and Sweden. That’s certainly a possibility. France’s Alcatel and Germany’s Siemens are in the running, as are Nokia of Finland and Sweden’s Ericsson. “These kinds of contracts are our raison d’etre,” says a spokesman at Alcatel, which clinched a $75 million contract to update Iraq’s fixed-line phone service after the first Gulf War. “We have experience in Iraq, and we would like to go back.”

Given the current anti-French mood in Washington, any contract for Alcatel may be a long shot. In fact, Motorola is a strong candidate despite its relative lack of experience in the region. And Motorola isn’t alone. TSI, a New Jersey company, won a bid to install a GSM system in Afghanistan.

Still, French leaders are hoping their companies won’t get shut out. “We are actively working together with business leaders here on this topic,” said Benoit Gausseron, a French finance ministry official. Added Alcatel’s spokesman: “We never mingle business with political issues. Technology-wise, we can provide every kind of network Iraq would need.”