A quick rollout of mobile telephone services in Iraq looks increasingly unlikely as the Pentagon probes alleged corruption in the awarding of licences, the Middle East Economic Survey (MEES) reported.
Iraq's ministry of communications had stressed the systems must be operational within two months when contracts were signed with three consortiums on Oct. 6.
Egypt's Orascom Telecom Holding, Kuwait's National Mobile Telecommunications (AsiaCell) and Kuwait's Mobile Telecommunications Company (AtheerTel) were even put into a race where the first to establish a system in its designated area would then be able to start competing in the other two regions.
However, predictions that Iraq would have a mobile network in place by the end of the year "are looking increasingly unlikely, because the signing of the contracts has been delayed by a Pentagon investigation into allegations of corruption in the license awards," the newsletter says.
The Financial Times reported last week that two Coalition Provisional Authority (CPA) officials and interim Telecommunications Minister Haidar al-Abbadi, were under investigations over allegations of bribery regarding the Orascom contract.
Orascom and partners deny paying any bribes as does Abbadi.
The industry newsletter quoted one of the unsuccessful bidders as saying: "There are just too many accusations flying around about special interest groups and individuals with certain connections. They will have to investigate the whole procedure even if it is just to show there is no impropriety.
MEES says: "The current inquiry, which is in a preliminary stage, is apparently being conducted by the Pentagon Inspector General's Office following claims that the contracts were awarded on the basis of political connections rather than on technical merit."
"As soon as the awards were made they sparked controversy with many alleging that the procedure was not sufficiently transparent and favored special interest groups particularly from within the current ruling circles in Iraq," adds the Cyprus-based newsletter.
Orascom has been chosen for the central region which includes Baghdad, AsiaCell for the north, and AtheerTel for the south.
Last week, Kuwait's Mobile Telecommunications Co said its southern network has been delayed for security reasons, but insisted the project will go ahead.
Until the new systems are up and running, Iraq remains the only country in the Middle East and North Africa not to have a mobile network.