When the tender for the license was originally announced, Iran’s minister of communications and information technology, Mohammad Soleimani said the project is estimated to attract US$3 billion in investment.

Oman Telecommunications Company (Omantel) had been shortlisted for the license, and Russia's Megafon and Vimplecom had also confirmed being approached to submit bids.

Iran has two main networks, the incumbent state operator, TCI - which the Mobile World estimates ended September with some 27.8 million customers, and 65% of the market. Irancell ended the month with 13.1 million customers, and a small regional operator, Taliya has an estimated 1.5 million customers. There are also a couple of tiny local operators with negligible subscriber bases.

There was controversy over the allocation of the country's second GSM license. Turkcell, though its 51% owned subsidiary - Irancell, originally signed an operator license with the Iranian government in 2004, but it fell foul of a clamp down on foreign investments by the conservative Parliament. The Parliament accused the company of having links with Israel - and after a year of battles, the license was reissued - this time to South Africa's MTN Group. MTN took a minority 49% stake, while 51% was allocated to the Iran Electronic Development Company (IEDC).

The Iranian government also recently announced plans to sell off a second stake in the state owned telecoms operator, the Telecommunication Company of Iran (TCI). The government recently floated a five percent stake on the local stock market and had been expected to seek an external investor. Ali Rahmani, managing director of the Tehran Stock Exchange has now confirmed that a 49% stake will be sold to a single investor, with a foreign party being invited to take up to 35% of the company.

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