Telecoms expand in Iraq, other risk zones

KUWAIT — Emad Makiya, chief executive officer of Zain's Iraqi unit, has had to contend with suicide bombings, kidnappings, curfews and a network sometimes jammed by U.S.-led forces to prevent insurgents from communicating.

That isn't stopping Zain, Kuwait's largest phone company, from investing as much as $300 million in Iraq this year after spending $4.5 billion there since 2003, he said. With about 12 million subscribers, the unit is Zain's biggest by sales and was behind only Kuwait in profit in the third quarter.

"We're willing to invest more, to expand more," Makiya, based in Baghdad, said in an interview. "We want to cover every village in Iraq."

Undeterred by the dangers, Zain, France Telecom and Emirates Telecommunications Corp. are expanding in some of the world's most hostile environments, from Iraq and Afghanistan to the Democratic Republic of Congo. South Africa's MTN Group, Swedish-controlled Millicom International Cellular and Egyptian-Italian group Wind Telecom are also betting the rewards in war zones outweigh the risks as making money from more-stable markets gets tougher.

Politically unstable regions can put phone companies in tricky spots, with the importance of mobile networks in organizing opposition making them targets of government crackdowns.

"Sooner or later, even the most unstable countries settle down, and then you can have an established brand and established relationships with the government," said Pervez Ghauri, a professor of international business at King's College, London.