etisalat to invest Dh1.5b in Iran

Dubai: etisalat yesterday announced that a consortium led by it has won the bid for the third mobile network licence in Iran for an upfront fee of 300 million euros (Dh1.5 billion).

The etisalat consortium, which consists of the UAE telecom major and Iranian Tamim Telecom, a company owned by Social Security Organisation (SSO) in Iran, outshone other bidders on the strength of its technical qualifications and its offer of revenue sharing percentage with the government throughout the duration of the licence. etisalat's share is 49 per cent in the consortium.

The new licence includes 2G and 3G with a two-year exclusivity for offering the latter.

"We expect our Iran services to start within the next few months," an etisalat executive told Gulf News.

Mohammad Hassan Omran, chairman of etisalat said in a public statement, "We have always been keen to enter the Iranian telecom market as it fits our growth strategies. The Islamic Republic of Iran has a very attractive investment environment and our intention was endorsed by careful studies for the Iranian market and all the economic indicators."

Among others bidding for the mobile licence was Oman Telecommunications Co (Omantel).

The Middle East currently has 133 million mobile voice subscribers, growing at a year-on-year rate of 37 per cent, according to latest statistics by Informa Telecom and Media, industry researchers.

Most of this growth is coming from Iran. The country's penetration jumped from 17 per cent to 60 per cent within two years, Nicholas Jotischky, principal analyst at the firm said.

"The telecom market in Iran has a very promising future, mainly due to its rapidly growing population estimated at 73 million and the low penetration rate of mobile telephony and other telecommunications services with around 40 million 2G subscribers divided between two national operators and 3 other regional operators," Jamal Al Jarwan, chief executive of International Investments at etisalat said in the statement.

Mathew Reed, senior analyst at the same research firm said that Iran is expected to be very attractive. "It is the biggest opportunity in the region for investors. Next year, Iran will be the single largest growth market in the region with 11 million new mobile subscribers," Reed said.