Despite the growth of the telecommunications sector, the size of competition and the growing demand in Iraq, the three companies Zain, Asiacell and Korektel operate in a condition of oligopoly in telecommunications sector but they provide a poor service compared with the global developments in this sector.
In 2007, the Iraqi government signed a contract with the three companies, with a duration of 15 years and a total value of about US$3bn. It seems that the fact that these companies felt comfortable with the absence of a new competitor in the sector over these long years was one of the reasons behind not motivating them to develop their services to customers.
For example, until 2015, all telephone companies were using GSM with 2G technology for communications which is an old technology that was surpassed in many countries. Only after 2015 the three companies launched the 3G service together, while neighboring countries of Iraq had been already using the 4G and 5G technologies.
However, in June 2013, “Fastlink” entered the telecommunications and data market in the Kurdistan region as the first 4G LTE operator. Fastlink covers the three major provinces in the region: Erbil, Sulimaniyah and Dohuk, and the company has stated that they wish to eventually offer coverage in the entire country.
In December 2019, at the 13th edition of the Telecom Review Leaders’ Summit, Ahmed Diwan, COO of Korek Telecom discussed the prospects of 5G in Iraq in an interview. He emphasized the technological and infrastructural challenges which 5G faced. “This is an issue because 5G is not just a technology meant to be used by individuals only, but for industries and enterprises too; which is why we need to convince industries to reform the ways in which they are working and formulate their own strategy to ride the digital transformation wave”
It seems that the rapid growth of the telecommunications sector was not in the Iraqi government's calculations if less than five years after a 15-year contract for 2G services was signed in 2007, two new generations of communication technologies appeared. The long expiring date of the contract made the phone companies keen for profit more than for the development of communication technologies.
The three companies offer nearly identical services in terms of calls cost, international roaming, prepaid lines billing and internet services. These services are often criticised by customers who complain about the absence of a clear mechanism for calls fees, poor service and lack of coverage in certain areas of the country. The signal is particularly weak especially at the outskirts of cities, as well as in the countryside and villages, because companies do not deploy sufficient cell phone towers.
Iraqi lawmakers say that the corruption crisis that hit different sectors in the country has also included the communications sector. They say that the telecom sector sector suffers from corruption because senior officials have been allegedly covering the failure of these companies and refrained from monitoring and punishing them under the terms of contract.