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Technical Issue Snags Wireless Plan for Iraq



United States, Mar 28, 2003 (Newsbytes via COMTEX) -- The U.S. government is planning to rebuild Iraq's national wireless network with a standard developed by a consortium of European companies, a move that has angered a California congressman who supports an American alternative.

Rep. Darrell Issa (R-Calif.) introduced legislation yesterday that would effectively force the U.S. Agency for International Development to award a contract for the work to a U.S. company using the CDMA (Code Division Multiple Access) standard developed by San Diego-based Qualcomm Inc.

The project comes as the telecommunications industry has been hobbled by a sharp downturn in business. Qualcomm is locked in a country-by-country battle with telecommunications carriers that use a European wireless standard known as Global System for Mobile Communication (GSM).

Issa's bill also calls on the aid agency to give preference to U.S. companies in all other contracts awarded for the reconstruction of Iraq.

Because Iraq's existing network already uses GSM technology, and because most other countries in the Middle East do so, too, the agency is likely to award the contract to a GSM-oriented company, the source said.

"After the war, you want all these businesspeople from all over the world, and not just from the USA, to go there and have their phones work," the source said.

If the contract does specify a GSM network, Illinois-based Motorola Inc. is likely to be the front runner for the project. Motorola is the only major U.S.-based company that manufactures GSM equipment. "It is extremely unlikely" that the contract will not go to Motorola, said one source familiar with the process.

A USAID spokeswoman declined to comment yesterday.

Issa dismissed the GSM standard yesterday as a qualified contender for the contract because it was developed by a consortium of European countries. Issa estimated the value of the contract to be $1 billion and royalties from the standard to be as much as $100 million.

"If we were going to give $1 billion worth of wheat to Iraq, would you care if it was U.S. wheat or French wheat?" asked Issa.

The source with knowledge of the proposed contract said its value may be as little as $200 million. Ultimately it will depend on how much of the existing wireless network is left standing after the bombing campaign in Iraq. The contract is likely to encompass a network serving the entire populated region of Iraq, including Basra in the south and Kirkuk in the north.

Motorola declined to comment. Qualcomm did not return calls yesterday.

While GSM now has broader distribution, CDMA is popular in the United States and Asia, in part because it uses airwaves more efficiently and is better able to transfer data. Consumers around the world are increasingly using their wireless phones to send and receive data.

Issa said he was concerned that the U.S. government would effectively give its seal of approval to GSM at a time when the two standards are competing around the world. "They are sending a message to Jordan and the other countries: 'Don't buy CDMA -- even the U.S. government buys GSM.' "

Qualcomm donated $5,500 to Issa's campaign during the last election cycle, making the company one of his top contributors, according to the Center for Responsive Politics.

The agency is planning to put the contract out for bid next month.

Issa promised opposition: "This fight isn't over until someone says so on the House floor."


By Christopher Stern Reported By TechNews.com, http://www.TechNews.comCopyright 2003 The Washington Post Company

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KEYWORD: United States
SUBJECT CODE: WIRES
technology/specials/telecom/wireles