Country Profile: Iraq

Iraq is enjoying a moment of relative stability following a tumultuous period of political instability, with Fitch recently affirming Iraq’s IDR at a B- with a stable outlook. However, a weak government, domestic tensions that are likely to rise leading up to 2025 elections, and a reliance on declining oil export prices all contribute to heightened risks. GDP growth fell from 7% in 2022 to 2.5% YoY in Q1 2023, but inflation remains low at 3.7%. The US has been restricting the flow of US$ through Iraq into sanctioned neighbours, leading to a 3.2 average annual depreciation of the Iraqi dinar vs US$.

Iraq has three nationwide MNOs; Zain, Asiacell (owned by Ooredoo) and Korek Telecom. Zain has the largest mobile market share, with Asiacell close behind, whilst Korek Telecom is the country’s fastest growing operator which is dominant in the Kurdistan region.

TASC Towers operates 4,968 towers including an additional 300 managed sensitive sites acquired from Zain, and is targeting 300-450 greenfield tower deployments per year, although the priority is in upgrading existing sites. Consolidation is hot on the heels of TASC’s Zain acquisition, with Asiacell’s 7,100 towers in the process of transferring ownership to TASC after the completion of the merge Ooredoo and Zain’s sites under TASC Towers. Despite low tenancy ratios of close to 1.0x for Zain and Ooredoo sites, this number is expected to increase over time as TASC decommission overlapping sites and drive-up

colocations.

Assuming regulatory approvals run smoothly TASC will become the dominant tower owner in Iraq, operating around 70% of the country’s towers. Korek Telecom has been in the process of reviewing its passive infrastructure for some time but has yet to make a clear decision. The MNO has found itself in hot waters recently, having its connection suspended after failing to pay US$800mn in taxes and licensing fees. While this doesn’t bode well for the operator, a sale of its passive infrastructure could be a way to raise the needed capital.

In addition to the three nationwide operators, there are a host of 4G LTE players in the Kurdistan region, Fastlink being the largest with Tishknet, Goran-Net and Mobitel amongst the other players.

In October 2023 Iraq announced plans to introduce a 5G license with Al-Salam Telecommunications Company granted license to manage the new network and is inviting global firms to bid for installation and operation. However, 4G remains a priority for MNOs after Korek launched services in 2021.

Although new build-to-suit rollouts have been limited compared to previous years with Korek reporting IRAQ a drop from 1,000s to 100s, MNOs are looking at upgrading the existing network and increasing capacity. This includes antenna organisation, fibreto-site rollout and data centres to improve quality of service.

Iraq’s MNOs are struggling with high opex, attributable in large part to security and logistics issues across the country. Power remains a major challenge and while

figures for power availability vary by region and by time of year (with 11-12 hours outages per day being normal). Most sites are reliant on two diesel generators and so TASC Towers has live RFPs out for almost all aspects of O&M; batteries, solar PV, hybrid solutions, RMS and maintenance vendors. Hybrid solutions are yet to have any large-scale trials in the country but MNOs have started to look at alternative energy solutions to move away from the costly and difficult logistics of diesel energy. Asiacell has been rolling out rural sites using solar power.

Local ISP IQ Networks is Iraq’s major fibre deployer with over 10,000km laid. IQ is transitioning into the broader connectivity space, operating three colocation datacentres and is building a tower pilot on 100 sites.

While IQ do not yet operate any towers, their executive team has informed TowerXchange their appetite to acquire tower infrastructure