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Turkey eyes stake in Iran telco

'Turkish delegation' expected to travel to Iran to examine buying shares in state-owned TCI.

A Turkish delegation is expected to visit Iran shortly to discuss the possible purchase of a stake in the Islamic republic's state-owned telecommunications firm, an Iranian official said in comments published on Sunday.

Davoud Zareian, head of the public relations office of the Telecommunication Company of Iran (TCI), said delegations from Russia, China and Indonesia had already come to the country for talks about buying shares in the company.

He did not name the parties that have shown interest in TCI, which provides all of Iran's landlines and also operates a mobile phone network.

Foreign companies are typically wary of investment in Iran, the world's fourth-largest oil-exporter, due to a dispute with the West over its nuclear activities.

"It is predicted that in the near future a Turkish delegation will travel to Iran to examine the possibility of buying shares in the company," Zareian told the semi-official Fars News Agency in a report published by the Qods daily.

The head of the Tehran Stock Exchange, Ali Rahmani, said in September a stake in TCI would be put up for sale by the end of the 2008/09 Iranian year, which ends March 20.

Rahmani said the size of the holding to be offered to strategic investors had not yet been fixed but that it was likely to be around 49 percent.

This would require any foreign firm bidding for the stake to team up with an Iranian entity as a 35 percent limit has been set for non-Iranians. The state will keep 20 percent ownership.

"There is the possibility that Iranian companies would enter into partnership with foreign parties and purchase the company's telecommunication shares on a joint basis," Zareian told Fars.

In September, Rahmani said South Africa's MTN Group, sub-Saharan Africa's biggest mobile operator, was among those interested in TCI, but Zareian did not mention South Africa in his comments reported by Fars.

MTN is already present in Iran, with a 49 percent stake in Irancell, a mobile phone company competing with TCI.

The sale of TCI is part of a wider drive to speed up the sale of state-owned companies, though not in the upstream oil and gas industry, which will remain in government hands.

The Islamic state tried to shake up its lumbering economy in 2004 by overturning an article in the constitution that requires core infrastructure to be run by the state.

Private business has previously shown little appetite for privatisations in Iran, which is under UN and US sanctions over its refusal to halt sensitive nuclear work that the West fears is aimed at making bombs. Iran denies the charge.

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