Turkcell looks set to quit as lawmakers vote to cut stake

Conservative hardliners in Iran’s government have voted to cut Turkcell’s stake in a new mobile network operator to 49%, leaving the Turkish group with very few options other than to carry out its threat to quit the venture. In a live radio debate, parliament backed proposals from a parliamentary commission to reduce the Turkcell-led consortium’s holding in the new GSM network to 49% from the nearly 70% it had signed up for. 161 of 212 lawmakers voted in favour of restricting the foreign company’s shareholding following concerns over allegations that the Turkish cellco has links to bitter foe Israel which could threaten national security if it gained access to phone lines. Initially worth USD3 billion, the Turkcell deal was seen by many as a test case to gauge Iran’s readiness to inward investment, but last month the union turned sour when the Turks said they would walk away if Iran cut its shareholding. If Turkcell formally rejects the parliament’s decision, the Iranian government will have to decide whether to re-run the tender or enter into talks with MTN of South Africa, which was runner-up to Turkcell the first time round. MTN’s Iran country manager Chris Kilowan is on record as saying that the operator is ‘prepared to readjust’ to comply with Iran’s new legislation vis à vis shareholdings.