Subject: [NEXTEL-1] MCI Will Build Cellphone Network

From: [email-masked]
Date: Fri, 16 May 2003 05:49:49 -0400

MCI Will Build Cellphone Network
In Iraq by June Under U.S. Contract

By JESSE DRUCKER and MICHAEL M. PHILLIPS
Staff Reporters of THE WALL STREET JOURNAL

The Bush administration has tapped MCI -- the
former WorldCom Inc. -- to build a small
cellular-telephone network in Iraq to help speed the
much-criticized reconstruction effort there.

The system is expected to be in place by June,
according to the company, which is reorganizing
under federal bankruptcy-court protection. Cellular
communications would allow U.S. officials,
American troops and international aid workers to
coordinate better among themselves, removing one
of the major obstacles to the U.S.-led rebuilding
campaign.

It is unclear when the contract was awarded or how
much MCI is earning for the deal. Equipment for the
network already has started arriving in the country
and eventually will be able to accommodate between
5,000 and 10,000 users, according to a person
familiar with the pact.

A Pentagon official said the contract is worth about
$45 million, but gave no details.

Business Week and CNN previously disclosed the
contract.

The deal gives MCI a beachhead in a market that
many telecom companies and investors have an eye
on enviously. The Bush administration plans to leave
decisions about major phone projects to an interim
Iraqi government.

"The reason why it's not to be assumed that MCI
will ... cash in on bigger contracts is there's still an
international political process that needs to play out
before big telecom and oil contracts are awarded,"
said Joseph Braude, the senior Middle East analyst
at Pyramid Research, a telecommunications
consulting firm in Cambridge, Mass.

Numerous Iraqi and American consortia are mustering resources to invest in the sector. But
they are
holding back on actual investments, in part because there is no Iraqi authority to give
them an operator's
license or concession, and they don't want to risk expropriation by a new government. In
addition, they
are nervous about remaining U.S. and United Nations sanctions.

"We're ready to go into Baghdad the day it's legal," said William T. Carlin, chief
operating officer of
interWAVE Communications Inc. of Mountain View, Calif. His company, which was working with
an
MCI competitor, supplies compact cellular networks for operators in developing countries.

MCI spokeswoman Natasha Haubold declined extensive comment on the deal, but said MCI "is
looking
forward to continuing to support its customers as their needs continue to change and
evolve."

MCI doesn't currently have a wireless network in the U.S., and exited from its
wireless-reselling business
last year. The company also disclosed the largest case of accounting fraud in U.S. history
last summer,
but the federal government has continued to award it large contracts in part because of
the perceived
need for competition in telecom services.

The Iraqi network will use GSM technology, the wireless standard in most of the world,
according to the
person familiar with the matter. A dispute over the future of Iraq's telecom
infrastructure erupted in
March when Rep. Darrell Issa (R., Calif.) demanded that the U.S. fund a network using a
technology
known as CDMA, which was developed commercially by Qualcomm Inc., one of Mr. Issa's
largest
campaign contributors.

http://online.wsj.com/article_email/0,,SB105296363137806100,00.html?