Dubai: etisalat is no longer the top bidder for Iran's third mobile operating licence, the company said in a statement.
An etisalat consortium consisting of Iranian Tamim Telecom, a company owned by Social Security Organisation (SSO) in Iran will potentially lose the licence to Zain, Kuwait Telecommunications Co.
Reuters, quoting IRNA news agency, reported that a spokesperson of Iran's Communications Regulatory Authority said the etisalat-led consortium had not "fulfilled its obligations".
Mohammad Reza Farnaqi, the spokesperson, said, "With the elimination of etisalat's&consortium from the third operator project, the Zain Iran consortium, which was runner-up in the bidding, takes over the project."
The consortium won the bid in December last year, while the second-highest bid was put forth by Kuwait's Mobile Telecommunications Co. (Zain)-led consortium.
While losing the licence comes as a significant loss of opportunity, etisalat said that it has not given up efforts to enter the Iranian market. "etisalat is and has always been committed to the development of the Iranian telecom market and perceives Iran as a great investment opportunity," it said in a statement.
The UAE-based operator had planned to invest $5 billion (Dh18.39 billion) over a period of five years for infrastructure in Iran.
Matthew Reed, a senior telecom analyst for Middle East and Africa at Informa Telecoms & Media said, "It's a blow for etisalat because it will now miss out on the substantial growth opportunities offered by the Iranian market. There were 19 million mobile net additions in Iran in 2008."
Reed said their sources say that a possibility for etisalat losing the licence was that the operator wanted to set up an offshore company rather than one based in Iran, in order to minimise risks, but the Iranian authorities were "not happy with that."
"Industry sources say Zain has been set a deadline of tomorrow to pay the licence fee," he added.
Mohammad Shakeel, Iran analyst at Economist Intelligence Unit said that while the loss of the bid winner position is not a "huge impact directly", an untapped, massive telecom market has now been shut off from the company.
"Given the current global economic environment, a foothold into Iran's emerging market, with its highly-educated and youthful population, would certainly have boosted etisalat's revenue stream," he said.
Iran has a history of reversing investment decisions, he said. A previous telecoms licence, which was awarded to a Turkish firm, Turkcell, was revoked following concerns over "national security".
