Overview:

Executive summary

The telecoms market in Iran is, as one might expect, one of the least liberalised in the region. Serious competition exists only in the mobile market where second national mobile operator MTN Irancell now has well over one third of the market. Further liberalisation, in the form of a third national mobile licence and the privatisation of incumbent Telecommunication Company of Iran, took place in 2009 but after a long gestation period and stop-start proceedings. Following its privatisation, a local consortium owns a 50% plus one share stake of TCI. Infrastructure remains under state ownership, managed by Telecommunications Infrastructure Company.

The third mobile licence tender had a particularly difficult path. The tender was launched in late August 2008 and in January 2009 the government confirmed that a consortium led by Etisalat of the UAE, together with local company Tamin Telecom, had won the licence. The consortium was reported as having submitted the highest bid in the tender, at US$402.1 million, plus a royalty of 23.6% of revenues. In May 2009 the government announced that the Etisalat consortium had been stripped of the licence, which would instead be awarded to the runner-up bidder – a consortium including Zain of Kuwait. The government claimed that the Etisalat consortium had not fulfilled its commitments and had not paid the licence fee, a claim Etisalat denied. Then in July it was reported that the Zain consortium had also ‘not fulfilled obligations’ and a new tender would be held. Both Etisalat and Zain are very experienced winners of mobile licence tenders and seem unlikely to have made such basic mistakes. Developments continued in October 2009 with the news that Tamin Telecom had won back the licence and was looking for an experienced international telecommunications consultancy partner. Tamin was planning to launch the third mobile operator by end-2010. The licence award to Tamin was confirmed in April 2010.

The process of the award of the second mobile licence had been similarly difficult and took two years from 2003 to 2005. That licence was also awarded and then re-awarded to another bidder. In that instance it was Turkish mobile operator Turkcell reported as not paying a fee by the required deadline. The final winner was MTN of South Africa.

Despite these regulatory difficulties and hazards, plus low ARPU, the mobile market is attractive for new operators due to Iran’s relatively large population and yet to be saturated market. The third licence includes a 3G licence with an exclusivity period.

Fixed-line penetration in Iran is higher than in most Middle East countries. Internet user penetration is probably not that much different from many countries in the region but most users access the Internet at Internet cafes or other non-residential access points. Internet subscriber numbers can only be estimated. Broadband subscribers can also only be estimated but numbers are almost certainly very small. Internet censorship is strict. Tamin Telecom has said that intends to launch mobile broadband services.

Iran is very stony ground for any form of digital media to grow or flourish due to the government’s strict control and censorship of Internet media and its banning of satellite TV dishes able to receive the wealth of free to air DTH satellite TV channels available in the region.

Market highlights:

• Iran is the largest potential market in the Middle East but one of the least developed.

• A third mobile licence has recently been granted, including exclusive 3G rights.

• Broadband penetration is very low but the recent launch of WiMAX and the intended launch of mobile broadband by the new mobile licence holder may change this.

• Internet and satellite TV are highly censored and controlled.

1. Executive summary
2. Key statistics
2.1 Cuntry verview
3. Telecmmunicatins market
3.1 verview f Iran’s telecm market
4. Regulatry envirnment
4.1 Backgrund
4.2 Privatisatin f TCI
4.3 WiMAX licences
4.4 Regulatry authrity
5. Fixed netwrk peratrs in Iran
5.1 Telecmmunicatin Cmpany f Iran (TCI)
5.2 Telecmmunicatins Infrastructure Cmpany (TIC)
5.3 ther licence hlders/Zha Kish
6. Telecmmunicatins infrastructure
6.1 Natinal telecm netwrk
6.1.1 Natinal Internet Netwrk (NIN)
6.2 Internatinal infrastructure
6.2.1 Submarine and terrestrial cable netwrks
6.2.2 Satellite netwrks
7. Bradband access market
7.1 verview
7.1.1 Censrship
7.1.2 Bradband and Internet statistics
7.1.3 ISP market
7.2 Bradband subscriber frecasts
7.3 Asymmetrical Digital Subscriber Line (ADSL)
7.4 Wireless (fixed) bradband
7.4.1 WiMAX
7.4.2 Internet via satellite (Ka band services)
8. Digital ecnmy/digital media
8.1 verview
8.1.1 2009 Presidential electins and fllw-up
8.2 Services
8.2.1 E-gvernment
9. Digital bradcasting
9.1 verview f bradcasting market
9.2 Satellite TV
10. Mbile cmmunicatins
10.1 verview f Iran’s mbile market
10.1.1 Mbile statistics
10.2 Mbile subscriber frecasts
10.2.1 Scenari 1 – higher grwth
10.2.2 Scenari 2 – lwer grwth
10.2.3 Ntes n scenari frecasts
10.3 Regulatry issues
10.3.1 Third GSM licence – Tamin Telecm
10.3.2 Secnd GSM licence – Irancell
10.4 Mbile technlgies
10.4.1 Lcal handset manufacture
10.5 Majr mbile peratrs
10.5.1 TCI/Mbile Cmmunicatins Iran (MCI)
10.5.2 MTN Irancell
10.5.3 Taliya/Rafsanjan Industrial Cmplex Islamic Cperative Cmpany (RIC)
10.5.4 Mbile Telecmmunicatins Cmpany f Isfahan (MTCE)
10.5.5 Telecmmunicatins Kish Cmpany (TKC)
10.6 Mbile vice services
10.6.1 Prepaid
10.6.2 Satellite mbile
10.7 Mbile messaging
10.7.1 Shrt Message Service (SMS)
10.7.2 Multimedia Messaging Service (MMS)
11. Related reprts

Table 1 – Cuntry statistics Iran – 2010
Table 2 – Telephne netwrk statistics – 2009
Table 3 – Internet user statistics – 2009
Table 4 – Bradband statistics – 2009
Table 5 – Mbile statistics – 2009
Table 6 – Natinal telecmmunicatins authrity
Table 7 – GDP grwth and inflatin – 2005 - 2011
Table 8 – Fixed lines in service and teledensity – 1995 - 2011
Table 9 – Fibre ptic netwrk grwth – 2004 - 2009
Table 10 – Internet users and penetratin estimates – 1996 - 2011
Table 11 – Internet subscriber estimates – 1999 - 2010
Table 12 – ADSL subscribers – 2000 - 2010
Table 13 – Mbile subscribers and penetratin – 1995 - 2011
Table 14 – Mbile peratrs, subscribers and annual change – 2009
Table 15 – Majr mbile peratrs market shares – 2006 - 2009
Table 16 – Frecast mbile subscribers in Iran – higher grwth scenari – 2014; 2019
Table 17 – Frecast mbile subscribers in Iran – lwer grwth scenari – 2014; 2019
Table 18 – MTN Irancell – Subscribers, revenue, ARPU and MU – 2006 - 2009