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Irancell licensed; Turkcell has until 4 September to pay

23 Aug 2005

After 37 months of legal and political wrangling, the Irancell consortium has finally been granted Iran’s second GSM mobile licence, but confusion continues to surround the participation of its dominant shareholder Turkcell. A statement released by the Information and Technology Ministry confirmed that local company administrators and IT Minister Ahmad Mutemidi had ratified the concession over the weekend. However, the licence has only been issued conditional to Irancell’s ownership structure, which limits the stake a foreign investor can hold in the company to 49%. The licence stipulates that Irancell should sign up one million subscribers by the end of March 2006.

Problems surrounding Irancell have rumbled on for more than three years, after it became known that Turkcell was to head up the joint venture consortium with a 70% stake. Those opposed to Turkcell’s ownership alleged the Turkish cellco has links to Israel which could threaten national security if it gained access to phone lines. An amendment to Iran’s foreign direct investment (FDI) bill was rushed through parliament to limit the company’s involvement to a 49% stake. Since then there has been much debate as to how to redistribute the 21% holding taken from the Turkish company. Last week the Ministry offered the shares to local financial institutions Bank Melli and Post Bank.

It was originally thought that Turkcell would cut its losses and exit Irancell, but in July it told the government that it intended to hold onto its reduced stake in the venture. Turkcell now has until 4 September to pay the guarantee bill for its holding. If it fails to pay by that date, South African mobile group MTN, which came second in the original tender, will replace it in the consortium. Turkcell has yet to make a public comment on the matter.

Iran, MTN Group, MTN Irancell, Turkcell

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