Turkcell finally gets go-ahead

15 July 2005
Turkcellhas agreed to the new terms for developing a GSM network in Iran as part of the Irancell consortium. Agreement prompted the Supreme Economic Council to formally award the project to the consortium, which must now finalise a shareholders' agreement (SHA) and register as a local company (MEED 1:7:05).

Under the new terms, defined by the Majlis (parliament) and Guardian Council, local consortium members must hold at least 51 per cent of the new company's shares and occupy four of its seven board positions. The other Irancell consortium members are Sweden's Ericsson, Finland's Tunaray, the local Parman Ertebadand Iran Electronic Development Company, a joint venture between Industrial Development & Renovation Organisation, the Defence Ministry subsidiary Sa Iranand Bonyad Shahid.

'Now it's all up to them,' says Massoum Fardis, the Telecommunications Company of Iran (TCI)official responsible for the second GSM network project. 'They must conclude the SHA, under the rules now adopted as part of Iranian law, and then register the company. Then they can start to develop the network.'

Fardis said the Eur 300 million ($358 million) licence fee will be paid when the new company is registered. Registration will also mark the beginning of the two year exclusivity period, during which Irancell will only face competition from the incumbent operator Mobile Company of Iran, a TCI subsidiary.

The Turkcell-led consortium won an international tender for the project in early 2004, but the contract was challenged by the new deputies in the seventh Majlis.

The second placed bidder, a consortium led by South Africa's MTN, had been held up throughout the process as a possible alternative should Irancell drop out of the licensing round. The South African company has set up an office in Tehran and is expected to compete in the next licensing round when it is issued.


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