etisalat to invest $5b in Iran over 5 years

Riyadh: Emirates Telecommunications Corporation (etisalat) expects to invest up to $5 billion (Dh18.35 billion) over five years in its Iran operations after winning the country's third mobile phone licence, its chairman said on Sunday.

"We will invest $4 billion to $5 billion in the Iranian operation in five years," Mohammad Hassan Omran said at an economic conference in Saudi Arabia.

He said etisalat, the second-largest Arab telecommunications company by market value, would spend $1 billion in the first year on its network in Iran.

Asked how the plan would be financed, Omran said etisalat had Dh10 billion ($2.72 billion) in cash reserves deposited with banks in the United Arab Emirates.

"We have not signed the contract yet with the Iranians for the licence," Omran said, confirming that etisalat would pay 300 million euros for the licence.

Tehran confirmed this month that a consortium made up of etisalat and Iran's Tamin Telecom had won an international tender for the licence. etisalat has said the group would have exclusive rights to provide third-generation (3G) services and it hoped to get at least one million subscribers in the first year.

Iran has a mobile penetration rate of less than 60 per cent, in a market where about half of its 70 million population is under 25 years of age.

Iran's nuclear row with the West has deterred many foreign companies from doing business in the country. US sanctions bar US companies from doing business with Iran.