MTN establishes office in Tehran

MTN was unsuccessful in its bid for the country’s second GSM licence, awarded instead to a consortium headed by Turkish operator Turkcell in March 2004

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By  Tawanda Chihota Published  April 26, 2005

South African mobile operator MTN today officially opened a corporate office in Tehran with the objective of laying the groundwork for the company’s participation in the process to award the country’s third GSM licence. This licence is expected to be issued next year, and MTN is keen to secure the concession, having failed to win the tender of the second GSM concession last year, which was awarded to a consortium led by Turkcell. “I think that when the third licence is awarded we will be in a strong position,” MTN’s country manager for Iran, Chris Kilowan, tells CommsMEA. “There is no other operator making this effort and when the tender is announced, we believe will stand a very good chance of winning it.” Kilowan says the number of MTN staff in the country is expected to eventually reach 10 by the time of the licence award process commences. Between then and now, MTN says it is becoming familiar with the competitive and operational landscape in Iran and maintaining contact with government officials. MTN was unsuccessful in its bid for the country’s second GSM licence, awarded instead to a consortium headed by Turkish operator Turkcell in March 2004. However, in September, the Iranian authorities hardened their line against foreign investment and forced Turkcell to reduce its stake in the consortium, Irancell, to 49% from 70%. Turkcell is battling to maintain its equity position in the licensee at a minimum level of 51%. Thus the licence award is still to be ratified, with latest reports suggesting that the conservative Iranian political watchdog, the Guardians’ Council, has rejected new security provisions in the contract. The reduction of Turkcell's stake in Irancell to 49% would see the Turkish operator's managing and control rights over Irancell restricted. “We have seen the government insisting on a 49% ownership cap for foreign companies, and we are comfortable to work within those parameters,” Kilowan says. “We are following the situation (regarding Turkcell), from a position that they have been awarded the licence, and what we should learn for when the next tender is launched,” Kilowan adds. MTN has followed the most acquisitive investment strategy outside of Africa of any operator on the continent, but is yet to score a success anywhere in the Middle East and North African region. The operator has participated in award processes in Saudi Arabia, Oman, Algeria and Iran without success. “We are quite convinced that the way we are approaching this matter (investment in Iran) will see MTN successfully investing in the Middle East,” Kilowan predicts. The office in Tehran will also be utilised to assess other investment opportunities in the region.

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