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eBusiness Begins Lining up for Baghdad

Baghdad may not be quite open for business yet, but at least one U.S. telecommunications company plans to be there when it is.

Menlo Park, Calif.-based interWAVE , which makes wireless products for telecommunications equipment providers, said Friday it plans to open an office in Baghdad to address an anticipated demand for more cellular wireless networks in Iraq. The office will handle sales, network engineering, and customer support.

Moves like these are only possible since the suspension on May 7 of the U.S. 1990 Iraq Sanctions Act.

As a prelude to the end 13 years of U.N. sanctions against Iraq, the United States and Britain tried to convince the U.N. Security Council Friday to give them broad control of the country's oil for at least a year.

William Carlin, Interwave's vice president of global sales and marketing operations said Friday his company has a cellular program that can be installed in a shorter timeframe compared to traditional network rollouts.

"We have already been approached by numerous organizations to develop the wireless infrastructure in Iraq, and having an office located in Baghdad will allow us to address our customers' needs with focused and dedicated local resources," he said.

But is it too early to start publicly talking about moving into postwar Iraq? According a source close to the wireless telecommunications industry, there is considerable interest in setting up shop in Iraq.

"Everyone's talking about it," said the spokesperson.

But JupiterResearch vice president and director David Schatsky says not everyone deserves to be there.

"I think there are a lot of companies licking their chops to move into Baghdad, but they have to recognize that there are politics involved at this point," he said. "There are going to be a lot of CRM and software companies that will jump on the bandwagon that have no business being there. I expect power, telecom and infrastructure companies to be the first in line and with the latest generation of infrastructure available, they have a good opportunity to build from a clean slate."

Currently, the only IT-related company that has been publicly recommended to participate in the reconstruction is San Diego-based wireless giant QUALCOMM and even then, not by the company's own admission.

Congressman Darrell Issa (R.-Calif.) is garnering support through the Pentagon, the U.S. Agency for International Development (USAID) and other lawmakers demanding that the Department of Defense and USAID show favor to CDMA technology over GSM .

QUALCOMM execs have only said they are "supportive" of the plan. Back in April, QUALCOMM renewed its licensing agreement with interWAVE to develop 3G systems based on CDMA.

But the chances of QUALCOMM or even Motorola being able to move into Iraq anytime soon will have to be weighed between the infrastructure and the political ambitions of the Middle East.

"International business people have already adopted GSM and I don't think its going to change any time soon," Schatsky said.

But as requests for proposals become more solidified, U.S. telecommunication and networking firms such as AT&T, Nortel, Lucent and Cisco will certainly be approaching U.S. lawmakers in backrooms about their vision. Much in the same way that British Telecom and France Telecom are also looking to pole position their way into Baghdad.

One source monitoring the situation told internetnews.com while the potential market in Iraq will be expansive considering the country had a healthy economy before the 1990 sanctions, a lot of rebuilding contracts will be "lucrative but not spellbinding."