Ericsson, Siemens receive equipment orders

06 December 2002

Sweden's Ericssonand Germany's Siemenshave received purchase orders from Telecommunications Company of Iran (TCI)for its programme to install 1 million new mobile phone lines. The two companies were selected in early December for the orders, having beaten off competition from Finland's Nokia(MEED 29:11:02).

The total value of the orders is Eur 77 million ($77 million), with the radio and switching equipment packages accounting for $53 million and $24 million respectively. According to final specifications drawn up by TCI, Siemens will provide 58 per cent of the required radio equipment, which is equivalent to a contract value of $31 million. Ericsson will supply 25 per cent of the order, while local firms Micromodje Industries and Funoonwill deliver 9.5 per cent and 7.5 per cent respectively.

The largest portion of the switching equipment has been allocated to Ericsson, which will supply 48 per cent of the total order. Siemens has secured a 37 per cent share, while Shiraz-based Iranian Telecommunication and Manufacturing Company (ITMC), in which Siemens is a 20 per cent shareholder, will provide 15 per cent.

The client has the option to increase the network by a further 250,000 lines.

Nokia withdrew from the competition in November, having failed to negotiate with TCI a final price agreement for its portion of the contract. The Finnish firm had been poised to secure a major share of the deal after it emerged as the low bidder in July (MEED 26:7:02).

TCI had initially planned to install the new lines in provinces outside Tehran. However, industry sources say the client has now indicated that a significant number of lines will be set up in Tehran, where demand is the highest.

TCI plans to issue a tender for an additional 1 million lines in 2003. The UK's Aircom Internationalis the consultant on this project, which is part of a TCI scheme to boost cellular line numbers to 5 million by 2004 from the existing 1.2 million. Another 5 million lines are planned from a second GSM licence (MEED 3:5:02).

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