Dubai channel upbeat about prospect of end to Iran sanctions
Local IT channel awaits nuclear talks deal with Iran
In the wake of increased Western pressure on Iran to make concessions over its nuclear programme after it and six world powers failed to meet a July 20 deadline for a deal to end the decade-old dispute, the local IT sector remains optimistic a comprehensive agreement that should lead to the eventual lifting of sanctions is in the offing.
Countries involved in the talks agreed to extend the high-stakes negotiations by four months to November, 2014, and let Iran access another $2.8bn of its cash frozen abroad during that period, though most sanctions on the Islamic Republic stayed in place.
Under the terms of the latest extension of the negotiations, Iran will be able to access during this time a relatively small portion of an estimated more than $100bn held abroad, in return for limits to its nuclear programme.
The deal prolongs - with some adjustments - an interim deal hammered out last year, under which Iran halted its most controversial nuclear work in exchange for some easing of sanctions.
Shailendra Rughwani, president, Dubai Computer Group, (DCG) and managing director at Experts Computer Group, said although the association has been monitoring the nuclear talks that are aimed at striking a deal to end over a decade of trade sanctions imposed on Iran, it is very important for all Dubai-based IT resellers to wait and follow the guidelines on the exempted products that will be allowed should the embargo be lifted.
Rughwani said IT companies should be preparing for the eventual opening of the market but should wait for guidelines before taking any steps. "Lifting of sanctions on Iran particularly for IT products is certainly going to boost the morale of the local IT market as Iran is one of the most potential market for reexport from Dubai," Rughwani noted.
He said the past few months have been a bit tough for the local channel and the opening of the Iranian market will surely be a boost to the local IT trade.
Mohammad Mobasseri, CEO at regional VAD EMT Distribution, added that although no official announcement has been made by the US authorities on easing trade sanctions on Iran, Dubai-based IT reseller companies that are eyeing this market will experience challenges to work directly with end-users without having in-country presence in that country.
Mobasseri said like most distributors in the region, EMT is also monitoring the situation and currently only works in markets where there is no trade embargo. "Being an international distribution player that has US brands in its stable, we have to comply with the trade sanctions. We are interested in developing business in Iran but can only do that if sanctions are lifted or clear guidelines are issued on what IT products and solutions will be allowed to be sold in that country," he said.
Hesham Tantawi, vice president at regional distributor Asbis Middle East and DCG Advisory Panel member, said any prospects of easing trade sanctions on Iran will cheer the Dubai channel, but partners that will succeed if this happens, are those that have a long term view of the market. "While we remain upbeat about the on-going talks between Iran and six world powers on a possible deal, partners need to start readying themselves for such a possibility," Tantawi advised.
He reiterated that reseller partners that are researching the market and developing long term initiatives should the market be opened will have a solid foundation from which their businesses will grow. "Box pushing and the IT trade mentality that has dogged the local channel will not bear any meaningful fruits. Partners need to understand the market from a business development perspective and tailor IT services that have been lacking in that market as a result of many years of crippling trade sanctions," Tantawi explained.
DCG's Rughwani agreed and said developing in-country partners will be crucial and a better way to develop the business once the market is opened up. "It's also important to keep track of currency fluctuations," he said.
He explained that as DCG the local IT trade body always advises computer companies to take a cautious approach and to study the market before taking any step.
Rughwani added that like other exporters, Experts Computer is also eagerly looking forward to the opening of the Iran market.
In June last year, the US Treasury Department announced the partial easing of sanctions on Iran that allowed American companies to sell mobile phones, gadgets, software and other technology used for personal communications to Iranians. The development, permitted Iranians to get access to the latest mobile phones and newest software, which had only been available in Iran through the black market since sanctions were first imposed in 1992.