China, Russia Keen to Invest in Iran's Telecom Sector

TEHRAN (FNA)- Several big economies in Asia have expressed interest in making large-scale investments in the Iranian telecommunications sector, an Iranian official said.

Davoud Zareian, a spokesman for the Iranian state-owned telecoms operator, said that investors from China, Russia and Indonesia have already voiced interest in acquiring a stake in the Telecommunications Company of Iran (TCI).

This is while Iran's telecoms regulator is expected to announce the winning technical bid for the third domestic mobile phone carrier at the end of the month.

The result of the technical bid will be out on November 30, and the winners would have until January 11, 2009 to submit their financial bids. The contract will go to the lowest bidder the following day.

The winner company will have to compete with current telecoms operators, namely, TCI and Irancell, which is 49 percent owned by the MTN Group.

The organizers have not disclosed the number of companies and firms, which have submitted their bids.

Qatar's Qtel expressed interest in the opportunity saying that it was in line with their plans to expand throughout the region.

PT Telekomunikasi Indonesia is also interested in acquiring a stake of up to 20% of Iran's national phone operator, the TCI.

"Telkom is ready to become its strategic partner," Telkom chief commissioner Tanri Abeng said in October.

Telkom plans to make its investment through its PT Telkom Internasional Indonesia (TII) subsidiary, its international operations unit. Tanri said that the deal will be funded internally.

As of the end of September, TCI had 24 million fixed line subscribers and 28 million mobile users. The company also operates a 79,000km optical fiber network in the country. According to charts on the Tehran Stock Exchange, shares of TCI are trading close to 20% above its initial listing price.

The sale of TCI is part of the Iranian government's privatization drive for state-owned entities across major industries. Foreign companies from South Africa, Saudi Arabia, France and Russia have reportedly expressed interest in TCI.

This is while Iran is facing US sanctions over its civilian nuclear program.

Iranian officials have dismissed US sanctions as inefficient, saying that they are finding Asian partners instead. Several Chinese and other Asian firms are negotiating or signing up to Iranian deals.

Following US pressures on companies to stop business with Tehran, many western companies decided to do a balancing act. They tried to maintain their presence in Iran but not getting into big deals that could endanger their interests in the US.

Yet, after western enterprises witnessed that their absence in big deals has provided Chinese, Indian and Russian companies with excellent opportunities to sign up to an increasing number of projects and earn billions of dollars, many western firms are increasingly showing interest to invest or expand work in Iran.