BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Telecomunications sector of Iran

If the developments that have occurred in Iran’s internet market over recent months continue, this could create substantial setbacks to the regulator’s plans in creating a modern telecoms industry. In October 2006, the Ministry of Telecommunications announced that high-speed internet access would no longer be made available to residential users in an attempt to curb western media influences, which led to the banning of web sites such as the BBC’s Persian-language site. This also led to some 100 VoIP calling card providers being affected, as they sought to adapt their business strategies from individuals to the corporate sector, the only segment of the market allowed to use broadband connections.

BMI feels that if progress continues to be hindered in this way, the country’s telecoms industry could undo all the work done in creating a more friendly business environment, and thus reducing its standing in our Business Environment Rankings Table. Although already at the lower end of the table, ranked tenth, and only ahead of Nigeria, the country made some strides in encouraging FDI when South Africa’s MTN was invited to manage mobile operator Irancell. At the same time the government had opened up the market to greater competition and raised investment to create a next generation network (NGN).

Moreover, while we have not made any changes to the country’s existing forecasts, the broadband sector is likely to experience a drop in demand, as the few ADSL subscribers it has, have been forced to sever their service connections. If the government is to rely on the corporate sector to make up for this shortfall, it may prove difficult, given Iran’s challenging economic outlook and over-reliance on oil revenues.

On the upside, greater growth can be expected from the mobile sector. We believe that Irancell’s goal of achieving one million users by YE06 is realistic, given that other SNOs in the region have managed to claim a significant portion of their mobile markets. One example is MTC-Vodafone Bahrain, which after three years, managed to achieve a market share of 31%. This is a similar target as indicated by the UAE’s SNO du. Greater competition from Irancell will also place pressure on TCI to modernise its network, and keep up with Irancell. However, with TCI’s network available nationally, compared to Irancell, covering just three major cities, this should provide the operator with a competitive advantage. Pricing strategies are also important in ensuring each operator’s performance. Currently, Irancell only offers services to contract users, therefore omitting a large segment of the market. Should TCI be able to offer a range of tariffs, it could become the preferred provider and continued engine for growth in Iran’s mobile market.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - Business Environment Rankings

Middle East & Africa

Iran

Iran Telecommunications Sector – SWOT

Chapter 3 - Industry Forecast Scenario

Fixed-Line

Table: Iranian Telecoms Sector – Fixed-line – Historical Data & Forecasts

Internet

Table: Iranian Telecoms Sector – Internet – Historical Data & Forecasts

Mobile

Table: Iranian Telecoms Sector – Mobiles – Historical Data & Forecasts

Chapter 4 - Macroeconomic Climate

Spending Drives Growth, But Inflation A Major Concern

Table: Economic Activity

Chapter 5 - Country Snapshot: Iran Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 6 - Competitive Landscape

Competitor Analysis

Table – Key Players: Iranian Telecoms Market

Key Players

Fixed-Line

Table: Regional Fixed-Line Penetration Overview

Internet

Table: Regional Broadband Penetration Overview

Mobile

Table: Regional Mobile Penetration Overview

Market Data Analysis

Fixed-Line

Internet

Mobile

Industry Developments

Chapter 7 - Company Profiles

Regional Case Study – Huawei Technologies

Huawei Technologies – Contract Sales (US$bn)

Major Contract Wins For Huawei Technologies in MEA

Operators

Telecommunications Company of Iran (TCI)

Irancell

MTN Investment In Iran

Chapter 8 - BMI Forecast Modelling

How we generate our industry forecasts

Telecommunications Industry

Chapter 9 - Appendix: Regional Demographic Data

The Long View: Data Over The Economic Cycle (2000-2007)

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Middle East & Africa Telecommunications Reports: Sample of Companies Ranked

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Commentary on key operators highlighting ownership structures, latest available revenue figures, market share analysis and ARPU counts. BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt. Company SWOTS Covering all leading telecommunications operators and manufacturers operating in each market, including competitive intelligence on geographic presence and competitive positioning against local companies; local market share; leading products, services and technologies; foreign direct investments, projects, merger and acquisition strategies.

Network of Middle Eastern and African Telecommunications Sources

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BMI's Middle Eastern and African Telecommunications Reports are based on an extensive network of multilateral organisations, government departments, telecommunications industry associations, chambers of commerce and company reports. Information sources include: