Iran telecom firm to offer ‘50% stake by March’

gulf-times - TEHRAN: Iran plans to offer a 50% stake in state-owned Telecommunication Co of Iran to international investors by March to boost the carrier’s future growth and improve the country’s ailing telco infrastructure, the head of TCI said.
“A potential buyer has to buy 50% of the telecom shares in an international tender. The subsequent presence of the owners’ representatives in the management of the company will lead to the growth of the company,” Saber Feyzi, managing director of TCI, told Dow Jones Newswires during a recent interview in Tehran.
The tender could be launched as early as by the end of the current Iranian year, which ends March 20, Feyzi said.
The successful bidder for the stake will be allowed three representatives on the company’s five-member board of directors and “can control its management,” Feyzi said.
Feyzi declined to say which operators had expressed interest in purchasing a stake in TCI but said companies from India, China, France, Russia, Turkey and Arab Gulf states had already met with TCI officials for preliminary tender information.
“They all have come to examine TCI. When the tender is open, they will offer their price. Until that time, we don’t know which one is seeking to buy,” he said.
TCI is the Islamic republic’s sole fixed-line services provider and is presently one of two mobile operators with a 70% market share, Feyzi said.
The carrier’s mobile subscribers quadrupled to about 28mn during the last three years and the figure is expected to rise by another 10mn within the next 10 years, Feyzi said. TCI currently has almost 25mn fixed-line users.
Lack of competition and investment have left Iran’s telecommunications infrastructure lagging behind other countries in the Gulf region.
US sanctions imposed on the Islamic republic over its controversial nuclear energy program have made it difficult for the Middle East’s second-largest oil exporter to secure a wide range of technologies.
Possible repercussions from investing in Iran have also made it difficult for the country to attract foreign investment and raise money to fund projects.
However, with a population of about 70mn, many of which are under the age of 25, the potential for future growth remains high, in particular on the mobile side.
“Iran’s mobile telephony market continues to grow at an impressive rate,” Business Monitor International, or BMI, said in its Iran Telecommunications Report published in October.
“After expanding by over 100% in 2007, Iran’s mobile customer base grew by a further 22.6% in the first three months of 2008. Our current forecast for the sector envisages growth of around 60% in 2008; this will enable penetration to rise to over 64% by the end of the year,” BMI said.
Feyzi said sanctions haven’t stopped IT providers from selling to Iran as contracts for equipment such as switches and transmission and radio systems show.
Companies including Siemens, Nokia , Eriksson, Alcatel-Lucent, Cisco Systems, Telaps, NEC, ZTE, Huawei Technologies Co and Wuhan Research Institute have all supplied the Islamic republic.
Feyzi said TCI was focusing on buying equipment and technology that isn’t considered dual-use or “problematic” due to the sanctions.
Privatising TCI will allow the firm to free itself from the constraints of certain state laws, raise employee salaries, increase investments into the company, and provide higher quality value-added services to customers, Feyzi said.
TCI currently employs 38,000 direct personnel – 13,500 of which are slated to retire during the next three years – and about 45,000 temporary employees through private subcontractors, which will no longer be used after privatization, according to Feyzi. –Zawya Dow Jones