Etisalat loses out on Iran mobile phone licence

UPDATE 1: UAE operator says it will review options after winning bid eliminated.

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By  Reuters Published  May 11, 2009

A consortium led by Kuwait's Mobile Telecommunications Co (Zain) will be awarded Iran's third mobile licence, ousting bid winner Emirates Telecommunications Corp (Etisalat), the official IRNA news agency said.

Iran said in January that a consortium made up of Etisalat and Iran's Tamin Telecom had won an international tender for the licence.

But IRNA quoted the spokesman of Iran's Communications Regulatory Authority as saying on Monday the Etisalat-led group had "not fulfilled its obligations".

"With the elimination of Etisalat's ... consortium from the third operator project, the Zain Iran consortium, which was runner-up in the bidding, takes over the project," said the spokesman, Mohammad Reza Farnaqi.

Etisalat said it is reviewing its options but plans to revert back to the Iranian regulator.

"Etislat has received notification from the Iranian Communications Regulatory Authority of the Islamic Republic regarding its bid for the third mobile licence is no longer the winner of the Iranian third mobile licence," Etisalat said.

The firm added it was reviewing its options, but was still committed to the development of the Iranian telecom market.

Zain, Kuwait's top mobile operator, has been aggressively expanding and operates in 23 countries in the Middle East and Africa.

Etisalat, one of the largest Arab telecommunications company by market value, had said it expected to invest up to $5 billion over five years in its Iranian operations after winning the licence.

Iran has a mobile penetration rate of less than 60 percent, in a market where about half of its 70 million population is under 25 years of age.

Emirates Telecommunications Corp (Etisalat) in January said it expected to invest up to $5 billion over five years in its Iran operations after winning the country's third mobile phone licence, its chairman said.

"We will invest $4 billion to $5 billion in the Iranian operation in five years," chairman Mohammed Hassan Omran told reporters at an economic conference in Saudi Arabia.

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