Terrorists in Iraq are pressuring telecoms operators to maintain the country’s mobile network so it can be used in their ongoing campaigns of violence, according to the country’s telecoms regulator.

Dr Siyamend Othman, chief executive of the Iraqi National Communications and Media Commission (NCMC), said that that he was aware of companies being "threatened by terrorists for delays in setting up masts".

He added that he was aware of several pieces of anecdotal evidence suggesting operators have been given guarantees of safety to maintain their networks.

He said that the security problems facing mobile companies were "different in nature" than for companies working on other infrastructure, such as the sewage system, in the re-building of post-Saddam Iraq.

"Terrorists like mobile companies," Dr Othman said.

Insurgent groups are understood to rely on mobile phones to co-ordinate attacks in Iraq, a country where only 3 per cent of the population has access to fixed line services.

Mobile networks have also been used by bombers outside the Middle East. The Madrid bombings of March 2004, which killed 191 and wounded more than 1,400, and the Bali bombs in October 2002, which killed 202, were both triggered using mobile phones.

According to experts, several remote bombs aimed at coalition troops in Iraq have been triggered using phones.

However, Ali Al-Dahwi, the chief executive of Altheet Telecom, which holds the mobile license for the region south of Baghdad, said that mobile networks had overwhelmingly been a force for good in the country and that he would never open a dialogue with a terrorist organisation.

"If you were to give these people one centimetre, they will ask for one mile," he said. "I can only speak for my company, but we thank God that we have been spared any such threats. In truth, in the south there is very little activity.

"If our competitors have received such threats I am sure they would not make them public," he added.

Dr Othman was talking yesterday at a conference in London held to discuss the allocation of the next round of mobile licences in Iraq, at a time of heightened security alerts in the British capital, following the bomb attacks on July 7.

Despite serious security issues, the prospect of high profits in Iraq, where the fixed-line telecoms network was devastated by years of war and sanctions, has led to high levels of interest from international companies keen to enter the rapidly growing mobile market.

Among the larger companies attending the event were Ericsson, Motorola, Nokia and Siemens. Dr Othman said several major mobile operators had expressed an interest in entering the Iraqi region.

Asked how NCMC proposed to tackle the problem of terrorists exploiting the mobile network, he said the watchdog, which is closely based on Britain’s Ofcom, was committed to providing a "universal service" and that implementing controls designed to prevent terrorists from using mobile phones would be difficult.

"We cannot ask if you are a terrorist or not … [to do so] would be highly impractical," he said.

Asked how much the Iraqi government hoped to sell the its licences for, he said: "We are going to try to get as much as we can. There are techniques for doing that and we plan to use every technique in the book."

Dr Jowan Masum, Iraq's communications minister, also present in London, said that business was "all about risk and reward" and that mobile phone companies were evidently prepared to take risks to unlock revenues from Iraq’s mobile sector.

The three incumbent mobile operators in Iraq have invested at least $1 billion in the country since 2003. Mr Al-Dahwi said Atheer had invested $430 million in the country, which he estimates has added around $2.5 billion to the region's economic growth.

Iraq hopes to auction off up to five mobile phone licences by the end of this year to replace three expiring wireless agreements. Dr Othman emphasised that he was keen to ensure a transparent auction process.

Times Recommends

• Minister in talks with Saudis to protect creditors
• Premier Inn hits back in £29-a-room row
• Bankers hit back at 'populist' bonus supertax