When the Iranian government announced Turkcell as the successful bidder of the nation's GSM license on February 18, 2004, the consortium's 28.1 percent government-allocated revenue share raised eyebrows among industry leaders.
With the going average hovering around 10-15 percent, it is no surprise that suspicions are mounting. Under the terms of the tender, each bidder was obliged to submit a business plan outlining revenue forecasts and a financial plan, which stipulated the percentage of revenues to be allocated to the government. The Turkcell consortium forecasted earnings of 250 trillion Iranian rials (approximately $31.6 billion), coming in only as the third highest bidder. A consortium led by South Africa’s MTN forecasted revenues of IR 434 trillion over 15 years and the a Kuwaiti-UK grouping, including MTC-Vodafone and Wataniya Telecom, came in with IR 265 trillion.
Sources close to the deal confirmed that Turkcell offered the Iranian government nearly 30 percent of earnings to be accumulated over the next 15 years, compared to MTN's 15.5 percent offering and MTC/Wataniya's 11.7 percent offering. Also bidding was a consortium led by Egypt's Orascom telecom, who offered a 16 percent revenue share to the government.
The GSM licence will be awarded to Turkcell after the company has paid the €300 million ($380 million) fee, which is expected to take place by mid-March. The consortium also includes Iran Electronic Development Company, a joint venture between Industrial Development & Renovation Organisation, the Defence Ministry subsidiary Sa Iran and Bonyad Shahid.
The Telecommunication Company of Iran (TCI) is currently the only state-owned GSM phone operator in Iran. The Islamic state has a population of approximately 70 million and a mobile phone penetration rate of approximately four percent. Duopoly competition and full competition after 2006 in Iran, are projected to increase penetration to over 23 percent by 2007. — (menareport.com)
© 2004 Mena Report (www.menareport.com)
