Turkcell takes sip of what could be poisoned chalice

Irancell's GSM network is set to be in operation by March 2006, but it is understood that Turkcell may find it difficult to secure funding for the project due to its lack of management control.

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By  Tawanda Chihota Published  September 5, 2005

Turkcell has decided to remain a part of the Iranian joint venture it established to operate the country’s second GSM network, and has signed an agreement to accept a 49% stake in the company, which offers it no management control. Turkcell had originally held a 70% stake in the licensee, but had seen its holding eroded due to political pressures against the foreign entity possessing management control of the operator. The Iranian government had set a deadline of September 4 for Turkcell to sign the contract, under threat that if the operator failed to do so, the agreement would be offered to second-placed bidder, South African operator MTN. In an announcement Turkcell said its board of directors decided to "perform the necessary transactions and take the legal steps necessary...to continue with the Irancell project." It is understood the Turkish company now has until November 21 to fulfil all its obligations and complete licensing payments believed to total US$367 million. Irancell's GSM network is set to be in operation by March 2006, but it is understood that Turkcell may find it difficult to secure funding for the project due to its lack of management control. State GSM operator, Telecommunications Company of Iran had 5.61 million subscribers as of end-August.

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