By Alex Ritman
The South African operator, a 49% stakeholder in Iran's second licence holder, has high hopes for the country and expects it to become its third key growth market.
MTN has said it expects to gain 31 million subscribers from its operations in Iran by 2015, the South African operator’s first investment in the Middle East. The service provider, which has so far been relatively quiet about its involvement in Iran, has now lifted the lid on its membership within the Irancell consortium, winners of the country’s second GSM licence.
Alongside its major operations in South Africa and Nigeria, Iran is set to become the third key growth pillar for MTN, according to CEO Phuthuma Nhleko, who hopes to launch the operation in August 2006. By the end of the year, the operator hopes to have 1.5 million Irancell subscribers, breaking even in three years.
MTN has a 49% stake in Irancell, having taken the place of Turkcell in November 2005 following disputes between the Turkish operator and Iranian authorities. MTN paid US$382 million as a licence fee, and has issued infrastructure tenders to the tune of US$603 million. The suppliers include Nokia, Huawei and one other that is still to be decided.
According to stipulations by the Iranian government, Irancell must have rolled out its network to 50% of the population in its first year. While Nhleko describes this demand as “onerous” he says that having around 12-15 million of Iran’s 69 million population living in Tehran should help with fast network rollout. However, threats of sanctions against Iran could be a challenge hindering the importation of equipment and software, Nhleko adds. "The honest truth is we haven't budgeted for bomb shelters, because we generally take a far more positive view of life.”
MTN, which has operations across six African nations, said that its customer base grew to 23.2 million at the end of December 2005, due mainly to its South African and Nigerian markets. It has announced its interest in the third GSM licence up for grabs in Egypt later this year, although has it not made a formal decision yet. “If we do make a submission, it will be due on the 17th or 18th of April,” says Nhleko.