Fixed, mobile sector programme moves ahead

08 March 2002

First steps towards privatising parts of Iran's fixed-line network were taken in February, with state-owned Khorassan Telecommunications Company (KTC)inviting local and international companies to submit proposals by 16 March for the establishment of an independent fixed-line network in Khorassan province. The Posts, Telephones & Telegraphs (PTT) Ministry is also drawing up tender documents for a build-operate-transfer (BOT) project for pre-paid GSM services and is considering issuing a second cellular licence (Iran, MEED Special Report, 15:2:02, page 30; MEED 16:11:01).

According to the tender released by KTC, a subsidiary of Telecommunications Company of Iran (TCI)in charge of Khorassan province, the successful bidder will install several privately owned fixed-line networks with 83,000 lines each. The project also calls for greater involvement of private companies in the operation, maintenance and development of more than 300 switching centres with a total of more than 220,000 lines throughout the province. In addition, companies are invited to bid for the installation of more than 330,000 lines under the ownership of KTC.

The projects are part of a wider programme announced by PTT Minister Ahmad Motamedi last year to upgrade and restructure Iran's underdeveloped telecoms sector. By the end of Iran's third development plan in March 2004, the programme calls for the number of fixed lines to be doubled to 20 million.

New plans have also been announced for the expansion of the cellular network, which is set to see capacity increased 10-fold to 10 million subscribers during the same period. TCI is expected to invite international telecoms operators before mid 2002 to bid for the installation of 2 million mobile phone lines to launch the company's first pre-paid services. Industry sources say the project will be carried out on a BOT basis for a period of 10-15 years. Potential bidders for the project could include regional players such as National Mobile Telecommunications Company (Wataniya Telecom)of Kuwait and major European carriers, industry sources say.

TCI is set to expand further its Tehran mobile network by another 3 million lines this year. It is understood that the operator in February appointed the UK's Aircom Internationalas consultant on the project. Aircom is set to carry out an analysis of Tehran's mobile network and to prepare specifications for the upcoming tender for the scheme.

Bids are being evaluated for a contract to install an additional 1 million mobile lines outside Tehran. TCI received bids from Finland's Nokia, Germany's Siemensand Sweden's Ericsson, the only companies authorised to bid for projects in the mobile phone sector. It is understood that Siemens was ranked first in the technical evaluation.

The next milestone will be the introduction of competition in the cellular phone sector. TCI last year unveiled plans to tender a second mobile phone licence and regulations to allow for a second operator were recently ratified. The project is expected to attract a number of major international carriers. However, industry sources say the release of tender documents is unlikely before an independent regulatory authority overseeing the sector has been established.

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