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Pre-paid launch in Iran drags on

A long-delayed network designed to support millions of additional mobile lines in Iran is not expected to launch until next year.

A long-delayed network designed to support millions of additional mobile lines in Iran is not expected to launch until next year.

Millicom, one of the firms awarded a contract to deploy the pay-as-you-go service, says that it will go live in Q105, a year later than originally scheduled.

Equipment needed to support the project has yet to be deployed, while the network is expected to have limited coverage once it is set up.

Observers add that a launch is unlikely to happen until after the Iranian New Year in March 2005.

“Equipment has gone into the country,” says Marc Beuls, president and chief executive officer, Millicom. “It’s still in customs as we speak. Hopefully that will come out shortly so that we can then look at a launch of a network in the first quarter of next year, although it will be a limited network, probably only covering the capital,” he says.

Millicom is part of a consortium that has been trying to finalise the build, operate, transfer (BOT) agreement since the beginning of 2003.

It teamed up with Rafsanjan Industrial Complex, the Iranian agricultural and industrial firm; and two other foreign companies, Mason and Commu1.

The move is among a series of plans drawn up in Iran to boost capacity and raise mobile penetration, which currently stands below 4%.

The intention is that the group will manage a network supporting two million pre-paid cards for Telecommunications Company of Iran (TCI), the country’s incumbent telco, before handing it over after ten years.

Eventually, the network is expected to generate at least 8,000 direct or indirect jobs and offer pre-paid SIM cards at a price of 200,000 Rials (US$25).

The government and TCI are also believed to be in talks with vendors over the addition of five million lines for the incumbent’s existing network.

But analysts warn that one-off fees for mobile connections could increase significantly if the additional capacity doesn’t materialise.

“The cost of a SIM card is expected to rise above US$1000, from US$500 at the moment, and perhaps double that on the black market,” says Lucy Norton, senior telecoms analyst, Middle East, World Markets Research Centre.

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