Because of technological restrictions, only three companies are able to carry out GSM expansions in Iran. All three - Sweden's Ericsson, Finland's Nokiaand Germany's Siemens- have bid for the work, for which prices are expected to be opened in mid-March. Project sources say that if there is little price discrepancy, the client, Telecommunications Company of Iran (TCI), is likely to split the work between the three. This is standard TCI practice because each of the suppliers has a strong technical presence in different parts of Iran.

The project is intended to go some way to meeting Iran's massive GSM demand shortfall before the prepaid build-operate-transfer (BOT) system or the new GSM network come into operation. The quality of GSM service in Iran is still poor because of the low ratio of connections to subscriptions and because of inefficiency in the use of processing units. An optimisation programme, intended to tailor the existing network to customer usage, is ongoing and should be completed within a year.

The contract for the new GSM licence has not yet been signed, but is on schedule to be closed by late March. The successful consortium is headed by Turkcell, which partnered Iran Electronic Development Company- a joint venture between Industrial Development & Renovation Organisation, the Defence Ministry subsidiary Sa Iranand Bonyad Shahid(MEED 20:2:04).