Summary
The telecoms market in Iran is, as one might expect, one of the least liberalised in the region. Serious competition exists only in the mobile market where second national mobile operator MTN Irancell now has well over one third of the market. Further liberalisation, in the form of a third national mobile licence and the privatisation of incumbent Telecommunication Company of Iran, took place in 2009 but after a long gestation period and stop-start proceedings. Following its privatisation, a local consortium owns a 50% plus one share stake of TCI. Infrastructure remains under state ownership, managed by Telecommunications Infrastructure Company.
The third mobile licence tender had a particularly difficult path. The tender was launched in late August 2008 and in January 2009 the government confirmed that a consortium led by Etisalat of the UAE, together with local company Tamin Telecom, had won the licence. The consortium was reported as having submitted the highest bid in the tender, at US$402.1 million, plus a royalty of 23.6% of revenues. In May 2009 the government announced that the Etisalat consortium had been stripped of the licence, which would instead be awarded to the runner-up bidder-a consortium including Zain of Kuwait. The government claimed that the Etisalat consortium had not fulfilled its commitments and had not paid the licence fee, a claim Etisalat denied. Then in July it was reported that the Zain consortium had also 'not fulfilled obligations' and a new tender would be held. Both Etisalat and Zain are very experienced winners of mobile licence tenders and seem unlikely to have made such basic mistakes. Developments continued in October 2009 with the news that Tamin Telecom had won back the licence and was looking for an experienced international telecommunications consultancy partner. Tamin was planning to launch the third mobile operator by end-2010. The licence award to Tamin was confirmed in April 2010.
The process of the award of the second mobile licence had been similarly difficult and took two years from 2003 to 2005. That licence was also awarded and then re-awarded to another bidder. In that instance it was Turkish mobile operator Turkcell reported as not paying a fee by the required deadline. The final winner was MTN of South Africa.
Despite these regulatory difficulties and hazards, plus low ARPU, the mobile market is attractive for new operators due to Iran's relatively large population and yet to be saturated market. The third licence includes a 3G licence with an exclusivity period.
Fixed-line penetration in Iran is higher than in most Middle East countries. Internet user penetration is probably not that much different from many countries in the region but most users access the Internet at Internet cafes or other non-residential access points. Internet subscriber numbers can only be estimated. Broadband subscribers can also only be estimated but numbers are almost certainly very small. Internet censorship is strict. Tamin Telecom has said that intends to launch mobile broadband services.
Iran is very stony ground for any form of digital media to grow or flourish due to the government's strict control and censorship of Internet media and its banning of satellite TV dishes able to receive the wealth of free to air DTH satellite TV channels available in the region.
Market highlights:
Iran is the largest potential market in the Middle East but one of the least developed.
A third mobile licence has recently been granted, including exclusive 3G rights.
Broadband penetration is very low but the recent launch of WiMAX and the intended launch of mobile broadband by the new mobile licence holder may change this.
Internet and satellite TV are highly censored and controlled.
Table of Contents
1. Executive summary
2. Key statistics
2.1 Country overview
3. Telecommunications market
3.1 Overview of Iran's telecom market
4. Regulatory environment
4.1 Background
4.2 Privatisation of TCI
4.3 WiMAX licences
4.4 Regulatory authority
5. Fixed network operators in Iran
5.1 Telecommunication Company of Iran (TCI)
5.2 Telecommunications Infrastructure Company (TIC)
5.3 Other licence holders/Zoha Kish
6. Telecommunications infrastructure
6.1 National telecom network
6.1.1 National Internet Network (NIN)
6.2 International infrastructure
6.2.1 Submarine and terrestrial cable networks
6.2.2 Satellite networks
7. Broadband access market
7.1 Overview
7.1.1 Censorship
7.1.2 Broadband and Internet statistics
7.1.3 ISP market
7.2 Broadband subscriber forecasts
7.3 Asymmetrical Digital Subscriber Line (ADSL)
7.4 Wireless (fixed) broadband
7.4.1 WiMAX
7.4.2 Internet via satellite (Ka band services)
8. Digital economy/digital media
8.1 Overview
8.1.1 2009 Presidential elections and follow-up
8.2 Services
8.2.1 E-government
9. Digital broadcasting
9.1 Overview of broadcasting market
9.2 Satellite TV
10. Mobile communications
10.1 Overview of Iran's mobile market
10.1.1 Mobile statistics
10.2 Mobile subscriber forecasts
10.2.1 Scenario 1-higher growth
10.2.2 Scenario 2-lower growth
10.2.3 Notes on scenario forecasts
10.3 Regulatory issues
10.3.1 Third GSM licence-Tamin Telecom
10.3.2 Second GSM licence-Irancell
10.4 Mobile technologies
10.4.1 Local handset manufacture
10.5 Major mobile operators
10.5.1 TCI/Mobile Communications Iran (MCI)
10.5.2 MTN Irancell
10.5.3 Taliya/Rafsanjan Industrial Complex Islamic Cooperative Company (RIC)
10.5.4 Mobile Telecommunications Company of Isfahan (MTCE)
10.5.5 Telecommunications Kish Company (TKC)
10.6 Mobile voice services
10.6.1 Prepaid
10.6.2 Satellite mobile
10.7 Mobile messaging
10.7.1 Short Message Service (SMS)
10.7.2 Multimedia Messaging Service (MMS)
11. Related reports
Table 1-Country statistics Iran-2010
Table 2-Telephone network statistics-2009
Table 3-Internet user statistics-2009
Table 4-Broadband statistics-2009
Table 5-Mobile statistics-2009
Table 6-National telecommunications authority
Table 7-GDP growth and inflation-2005-2011
Table 8-Fixed lines in service and teledensity-1995-2011
Table 9-Fibre optic network growth-2004-2009
Table 10-Internet users and penetration estimates-1996-2011
Table 11-Internet subscriber estimates-1999-2010
Table 12-ADSL subscribers-2000-2010
Table 13-Mobile subscribers and penetration-1995-2011
Table 14-Mobile operators, subscribers and annual change-2009
Table 15-Major mobile operators market shares-2006-2009
Table 16-Forecast mobile subscribers in Iran-higher growth scenario-2014; 2019
Table 17-Forecast mobile subscribers in Iran-lower growth scenario-2014; 2019
Table 18-MTN Irancell-Subscribers, revenue, ARPU and MOU-2006-2009
