Mobile Point View by Paul Ruppert: Untold Text Stories: SMS in IRAQ

One of the untold text stories I've been privy to is the amount of SMS that flows out of Iraq into destinations around the world and the success of texting in the Iraqi mobile market. Untold, since in 2005 I was being interviewed by FORTUNE and The Wall Street Journal on the market dynamics of SMS into and out of Iraq. Why the stories were eventually “spiked" is pure speculation since at the time the drive by media swarmed around the difficulty of the war and it's influencing the mid-term US Congressional elections. Explanations from both reporters were never forthcoming.

This was a "good news" story. It reflected the power of messaging to immediately connect far off families and friends with those on the frontline of battle, as well as the developing story of how telephony poor Iraq was able to swiftly launch mobile communications for its citizens. It illuminated how the natural need to touch with text blossomed in a country even in a very difficult commercial environment.

Here's the story. Back then I was responsible for the international P&L for the globe's leading SMS services provider to mobile operators. My job was to enable and harvest the world's SMS operator traffic flows. As part of a weekly call with my global staff I reviewed traffic patterns into and out of over 300+ mobile operators in 140 countries. In the fall of 2005 an interesting pattern caught my eye.

At the point of the 2003 invasion fixed line density in Iraq was among the lowest in the world with only 3% of the country's 25 million people having access to a telephone line. Soon after Sadaam fell, the Iraq Development Program issued 3 mobile operator licenses to Iraqna (means “our Iraq”) owned by Egypt's Orascom, Atheer MTC of Kuwait, and Asiacell, part of the Middle Eastern mobile conglomerate Wataniya. A considerable investment had been made by these companies, estimated at the time to be US$1.5 billion within 12 months, as well as an additional $250 million by Iraq's Ministry of Communications.

Mobile communications was the fastest growing sector in Iraq, and had become one of the "most significant markets" according to Ali al-Dahwi, CEO of MTC's Atheer. From all the numbers, mobile telephones were the only thing that was working well there, even in the face of significant security challenges including kidnapped employees, towers bombed, storefronts shot up and a huge security budget—relayed to me by an Iraqna executive to be up to four guards for each employee. There obviously was money to be made since they were still hanging around.

They made the right call. Demand for mobile phones began to soar. By 2005 Iraq’s nascent mobile market was already half the size of Egypt’s, despite Iraq’s population being only one-third of the size, and Egypt having a 10 year start.

I had successfully landed Iraqna as a customer when it launched since it was owned by Egypt’s Orascom which was already one of my customers. Upon initially launching we provided both in-country and international SMS interoperability for the fledgling Iraqna, and therefore had a complete picture of it’s message flows. It was astounding.

Iraq became our fastest growing SMS market in the Middle East. With over 1.5 million subscribers, over 20% of the messaging traffic was flowing into and from the US. At one point in the second month it spiked at over 40% of all SMS traffic. 20,000 SMS messages a day were being exchanged between the US and Iraq. In its first quarter overall growth was 400%. By January of 2006 Iraq’s traffic to the US was 22% of its total and was running at 1.2 million messages a month, or 40,000 SMS a day. At the time, the average cost of a mobile voice call to the US was 25 US cents per minute. An SMS cost 12 cents per message. Although the operators did not have a wide range of connectivity then the Top 10 SMS destinations for Iraq were:

1) US
2) Syria
3) Yemen
4) Fiji
5) UK
6) Palestine
7) Macedonia
8) Germany
9) Sudan
10) Thailand

Iraq was in the top 10 originations and destinations for US operators by January 2006:

Into the US                               From US
Mexico                                     Mexico
Philippines                                  Philippines
UK                                              UK
Ireland                                        Germany
Germany                                     Australia
New Zealand                               Ireland
Ecuador                                     New Zealand
Australia                                     China
Iraq                                           Iraq

The question that goes begging is who was driving all this traffic between the Iraqi operators and these destinations? Here’s an educated guess:
1) US Military members
2) Coalition Forces
3) Foreign Workers in Iraq
4) Contractors
5) US Government
6) NGOs in Iraq
7) Iraqis to friends and family abroad
8) Commercially driven messages—e.g., “call me at X so we can relay the details”
9) Insurgent/terrorist SMS communications. If they are calling the US and using the web, they are utilizing SMS text, too. [Q: If the US National Security Agency and the UK’s MI-6 can monitor voice calls, can they monitor SMS? A: Absolutely, they can.]

Today, Iraq has become an ignored mobile success story. From 2005 to 2007 it has had a growth rate over 600% going from 1.4 million subscribers to over 9 million with a third of its population now benefiting from direct access to telecommunications. Mobile market privatization in Iraq has catapulted it to being the second most competitive market in the Middle East according The Arab Advisors group. Iraqna alone is expected to reap over US$500 million in revenues this year. Not a bad four year track record. Now its a story told.