Qtel and Zain eye Iran’s third mobile licence

Pan-regional operators Qatar Telecom (Qtel) and Zain have confirmed their interest in Iran’s third national mobile licence, along with MegaFon and Vimpelcom of Russia.

Tender documents for the licence, which allows operators to provide 3G services, will go on sale on September 6, with the tender expected to attract US$3 billion in investment.

Currently 50 per cent of Iran’s 70 million residents own a mobile phone, but this could dramatically increase with the introduction of a third mobile operator and more competitive offers

“As a communications market with significant potential for growth and development, the Islamic Republic of Iran represents an investment opportunity,” Qtel said in a statement on the Doha bourse website.

“Qtel has not entered into any partnership in relation to this project. At the present time, it is studying the opportunity and will announce its intentions upon completion of its review.”

Earlier advice from Iran’s Ministry of ICT noted that foreign operators will only be able to receive a 49 per cent stake in the operation.

The country’s mobile penetration currently stands at approximately 50 per cent of the 70 million population, with state-owned Telecommunications Company Iran (TCI) and MTN Irancell the current providers.

Since launch in October 2006, second provider MTN Irancell has gained a 32 per cent market share to total 11.6 million subscribers at the end of June. This growth has been achieved in part through an aggressive ‘buy one, get one free’ campaign, competitive SIM pricing and promotional tariff plans, the operator explains.

According to a report by Business Monitor International, Iran sits at the lowest position on its Business Environment Rankings for the Middle East. Although the republic receives a relatively high score for its telecoms market, it suffers from having the lowest score in the region for regulatory independence.