Etisalat wins early Christmas present in Iran

Etisalat is reported to have topped the bidding for the third mobile licence in Iran. The concession will be ratified upon confirmation from Iran’s communications minister.

  The UAE-based company is reported to have beaten consortia fronted by Omantel and an unspecified Malaysian company, to win the licence.

Etisalat is believed to hold a 49 per cent stake in the winning consortium, the remainder being held by Iranian Tamin Telecom. The country’s second mobile operator MTN Irancell has a similar shareholder structure, with the South Africa operator MTN holding a 49 per cent share in the mobile operator and the remainder being held by the Iranian government.

Tender documents for the licence went on sale on September 6, though details of when the process officially closed and what the licence terms and conditions were remained murky. Earlier advice from the Ministry of Communications and Information Technology (MCIT) noted that the new licence would include access to 3G spectrum for an exclusive period.

The third entrant will compete with the state-backed Telecommunications Company of Iran (TCI), which operates both a fixed-line and mobile network. The second operator is MTN Irancell. Mobile penetration in Iran stood at over 50 per cent end-June, with TCI serving 24.6 million subscribers and MTN Irancell having been able to garner 11.6 millions customers at that time, having launched commercially late in 2006. Thus MTN Irancell enjoyed a market share in excess of 30 per cent.

For the quarter to end-September, MTN reported that subscriber numbers in Iran had risen 13 per cent to 13.14 million.

While the new entrant is only expected to come to market in the second half of 2009, the incumbents look determined to continue building their own business strategies in order to remain relevant in the market. MTN Irancell has been extremely successful so far in capturing market share within two years of operation. This success has been partly attributed to an aggressive ‘buy one, get one free’ campaign, competitive SIM pricing, strong branding and promotional tariff plans.