Iran Looking to Sell Large Stake in State Owned Telco

The Iranian government has announced plans to sell off a second stake in the state owned telecoms operator, the Telecommunication Company of Iran (TCI). The government recently floated a five percent stake on the local stock market and had been expected to seek an external investor. Ali Rahmani, managing director of the Tehran Stock Exchange has now confirmed that a 49% stake will be sold to a single investor, with a foreign party being invited to take up to 35% of the company.

"We had of course some interested foreign investors regarding this block (of shares) ... from South Africa, Saudi Arabia, France, Indonesia and Russia," he told the TradeArabia News Service. Rahmani named South Africa's MTN Group as one of the interested bidders, although the company is already a shareholder in rival mobile operator, Irancell.

The state aims to reduce its holding sequentially to the point where it retains a 20% stake in the firm.

Iran has two main networks, the incumbent state operator, TCI - which the Mobile World estimates ended last September with some 21.3 million customers and 74.7% of the market. Irancell ended the month with an impressive 6.01 million customers. There are also a few small regional operators with negligible subscriber bases.

TCI is also the country's dominant land line operator. 

There was controversy over the allocation of the country's second GSM license. Turkcell, though its 51% owned subsidiary - Irancell, originally signed an operator license with the Iranian government in 2004, but it fell foul of a clamp down on foreign investments by the conservative Parliament. The Parliament accused the company of having links with Israel - and after a year of battles, the license was reissued - this time to South Africa's MTN Group. MTN took a minority 49% stake, while 51% was allocated to the Iran Electronic Development Company (IEDC).

Both Vimplecom and Megafon, two of Russia's largest operators have recently said that they have been invited to bid for a third GSM license in the country.

On the web: Mobile World - TradeArabia

Posted to the site on 1st October 2008