A consortium affiliated with Iran’s Revolutionary Guard purchased a majority share in the country’s telecommunications company Sunday, Iranian media reported. The Etemad-e-Mobin consortium, comprised of Mobin Electronics Development Company, Shahryar Mehestan and Tose'e Etemad Investments, purchased a 51 percent stake in the Telecommunication Company of Iran (TCI) for $7.8 billion.
In less than thirty minutes, the 22,936,000,000 shares, priced at 34.44 cents each, made the transaction the largest flotation on the Tehran Stock Exchange to date.
TCI enjoys a monopoly over Iran’s fixed line infrastructure, Iran’s largest mobile operator (MCI), and Iran’s major Internet service provide (DCI). The latest deal is among the over 750 government contracts in construction and energy that have been granted to companies affiliated with the Revolutionary Guard, of which President Mahmoud Ahmadinejad is a former member.
TCI’s sale is part of a larger privatization initiative launched in 2006 by Ayatollah Ali Khamenei. In hopes of improving the economy and stock values, Khamenei ordered the government to sell 80 percent majority shares of its major state-owned companies.
According to Iranian state television, Etemad-e-Mobin was selected over another Iranian “quasi-governmental” conglomerate that had contended for the majority stake. A third company, Pishgaman Kavir Yazd Cooperative Company, was the only fully private sector bidder but was disqualified on “security grounds.”
Iranian economic analysts have criticized President Mahmoud Ahmadinejad's government for acting too slow on privatization. Several politicians have complained that privatization has only rewarded institutions affiliated with the ruling government at the expense of the private sector.
At least three-quarters of the Iranian economy is state-run.
