By SINAN SALAHEDDIN , 07.21.09, 07:56 AM EDT
BAGHDAD -- The Iraqi Cabinet has given preliminary approval to launch the country's fourth mobile telephone license, the government announced Tuesday.
Government spokesman Ali al-Dabbagh said a mixed public and private company will be set up to operate the network, which will offer 3G services. The Ministry of Communications will hold a stake in the company.
A committee has been set up to do a feasibility study, but no date has been set for the creation of the new company.
"The huge profits that this project will generate will be an important financial source for the government," al-Dabbagh said in a statement.
Iraq's economy has been badly hit by the fall in oil prices, which has forced the government to slash spending plans for this year from $79 billion to $58.6 billion.
Oil exports account for 95 percent of Iraq's revenues.
The government said the Cabinet approved a supplementary budget of about $3 billion because of a rally in world oil prices. The measure needs parliamentary approval to go into effect.
Mobile telephone services did not exist in Iraq under the rule of Saddam Hussein, who was toppled by the U.S.-led invasion in 2003 and hanged in 2006.
Three mobile operators are currently working in Iraq; Kuwait's Zain Group; AsiaCell, a consortium including Gulf nations; and Korek Telecom, an operator based in Iraq's Kurdish-run north.
The contracts are for 15 years and each license fetched $1.25 billion.
Citing poor performance, Iraq imposed fines on these firms of more than $20 million in May.
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